Sika Chairman Digs In Over Saint-Gobain Battle
27 February 2016 - 12:50AM
Dow Jones News
ZURICH—Construction and automotive chemicals maker Sika AG is
preparing for the long haul as it seeks to fend off a hostile $2.78
billion takeover from French rival Saint-Gobain SA, the chairman of
the Swiss company said Friday.
Baar-based Sika has been embroiled in a takeover battle for more
than a year after Saint-Gobain offered to buy the controlling stake
held by the company's founding family without making an offer to
other shareholders, which include billionaire Bill Gates.
Chairman Paul Hä lg said Friday that Sika's position had been
boosted by the company posting its highest ever annual profit.
"I am very pleased that these strong results support our defense
of Sika against Saint-Gobain," said Mr. Hä lg, who the founding
family have tried to replace.
He said the results showed that Sika's business hadn't been
damaged by the "difficult situation" with Saint-Gobain, that Sika
could be successful as an independent company, and didn't need
Saint-Gobain.
"The way we have organized ourselves means we can work in this
way for a long time," Mr. Hä lg said. Sika—whose products have been
used in The Shard building in London—was prepared to continue
resisting Saint-Gobain for as long as it takes, he said.
The takeover sparked fierce opposition because Paris-based
Saint-Gobain has proposed to buy only the 16% stake held by Sika's
founding Burkard family for 2.75 billion Swiss francs ($2.78
billion). Buying the family's investment vehicle gives control of
Sika as it has 52% of the voting rights in the Swiss company.
Sika's management has responded by limiting the family's voting
rights to 5%, a move that is now being disputed in Swiss courts
with a decision expected this summer, although appeals could be
lodged by either side.
Mr. Hä lg said Sika had made an alternative proposal to buy the
Burkard family's stake, "but they don't want to see it."
"I am very confident with our legal arguments," he said. "I
don't think that will be the end of it in the summer."
Earlier Friday, Sika reported a 5.4% rise in net profit for 2015
of 465.1 million Swiss francs ($469.8 million) in the 12 months to
Dec. 31, up from 441.2 million francs a year earlier, beating
analyst expectations.
Sales dipped 1.5% to 5.49 billion francs from 5.57 billion
francs in 2014, as the strength of the Swiss currency took a toll,
though were slightly ahead of analyst expectations for 5.47 billion
francs.
A spokesman for Cascade Investment LLC, the investment vehicle
controlled by Bill and Melinda Gates, said they continued to
"fiercely oppose" a Saint-Gobain takeover.
"There needs to be a solution that fits all the investors and
not just members of one family, and we would like Saint-Gobain to
walk away," the spokesman said.
This looks unlikely with Saint-Gobain repeating its commitment
to the deal.
"We are both patient and committed to completing the
Sika-transaction," said Saint-Gobain CEO Pierre-André de Chalendar
as the Paris company reported its full-year earnings on
Thursday.
Write to John Revill at john.revill@wsj.com
(END) Dow Jones Newswires
February 26, 2016 08:35 ET (13:35 GMT)
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