Sika looks at options to block Saint-Gobain's takeover bid
20 Apr 2015
Swiss chemical company Sika's board of directors are planning to buy the founding Burkard family's stake in the company in a bid to block a takeover by France's Saint-Gobain, SonntagsZeitung newspaper yesterday reported, citing two unnamed sources.
The Burkard family, the company's major shareholder, had in December 2014 agreed to sell its stake to Saint-Gobain for 2.75 billion Swiss francs ($2.8 billion).
The Burkard family's stake, held by Schenker-Winkler Holding AG, represents 16.1 per cent of the share capital, but 52.4 per cent of the Sika's voting rights.
Saint-Gobain, Europe's biggest supplier of construction materials, has said that it plans to buy a controlling stake in Sika, but has no plans to acquire Sika's remaining shares.
''Given the proximity of Sika's activities with those of Saint-Gobain (Construction Products and Innovative Materials as well as Building Distribution), the deal is expected to generate €100 million in synergies as from the second year (2017), and €180 million per year as from 2019.'' Saint-Gobain had said in a statement.
But Sika's board opposed the transaction and said in a statement that it ''does not support change of control to Saint-Gobain.''
''The Board and Group Management of Sika AG have neither been involved nor consulted in connection with the proposed transaction ….. and neither sees the industrial logic in the transaction, nor significant synergies for Sika… the Board and the Group Management believe that shareholder value would be impaired as Sika in the planned set-up would not be able to continue its successful growth strategy.''
Under Swiss law, it is not necessary for an acquiring company to make an mandatory offer after buying more than one-third of the target company.
Not only Sika's board, but other small investors comprising 83 per cent, like Bill & Melinda Gates Foundation Trust and Threadneedle Investments have opposed the deal on the grounds that transaction will give the Burkard family an 80-per cent premium for their stake while other investors receive virtually nothing.
At Sika's annual shareholder meeting held over the weekend, the board came with an alternative proposal of buying the entire stake held by the Burkard family for 2.25 billion Swiss francs, 500 million franc less than Saint-Gobain's offer, the paper said.
Another option being considered is that the Burkard family would retain a small portion of its stake and profit from a potential rise in value of the shares in the future to compensate for the 500 million franc shortfall, the paper added.
Sika is a specialty chemicals company with a leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing and protecting in the building sector and the motor vehicle industry.
Sika has subsidiaries in 90 countries around the world and manufactures in over 160 factories. Its more than 17,000 employees generate annual sales of CHF 5.6 billion.
