Swiss specialty chemical company SIKA AG management continues its opposition to a takeover bid by French conglomerate Saint-Gobain. There is a “necessity of safeguarding Sika’s successful business model in the interest of all stakeholders,” the company’s management said when reporting fourth-quarter sales.
“SIKA’s public shareholders, board of directors, group management, 160 senior managers and employee representatives remain opposed to Saint-Gobain’s hostile takeover bid, which they believe would fundamentally jeopardize the Sika success story,” management wrote in the sales report.
More than a year ago, Schenker-Winkler Holding (SWH) announced it was selling to Saint-Gobain, which would give the French conglomerate controlling interest in SIKA. SWH which is owned by the Burkard family, controls 16.1 percent of SIKA’s capital with 52.4 percent in voting rights. The wording of SIKA’s opt-out clause means Saint-Gobain does not have to reimburse or buy the remaining shares to gain a controlling voting interest in the company.
“There is still no evidence to suggest that there is any industrial logic behind the transaction,” according to SIKA’s management. “Saint-Gobain wants to control SIKA—as a competitor—by holding just 16 percent of its capital. This results in conflicts of interest. Since the plan entails Saint-Gobain having a majority on SIKA’s board of directors, the interests of the public shareholders would no longer be adequately represented.”
In response to the proposed deal, SIKA’s board has been restricting the voting rights of SWH to 5 percent of all registered shares. This has limited the company’s voting power during SIKA’s annual general meeting and extraordinary shareholders meeting.
SIKA’s board points to the company’s articles of association as the reason behind the restriction. Management says other Swiss companies have a similar ability to restrict voting rights in their articles of association, including Nestlé, Novartis, Swatch, Swisscom, Guivaudan, Sonova, Schindler and Lindt & Sprüngli.
Saint-Gobain management appears to remain confident the deal will go through. Its outgoing financial head said as much to Reuters recently.
The dispute will likely be tied up in the court system for some time.
“Due to legal proceedings initiated by the Burkard family against the company [SIKA] and some of its board members, which the final outcome may only be known in a few years, Saint-Gobain no longer predicts when the change of control would occur,” company’s management wrote in a recent letter to shareholders.
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