Sika Fends Off Saint-Gobain $3 Billion Takeover Bid Again --Update

By John Revill 

BAAR, Switzerland-- Sika AG has won another round in its battle to fend off a near $3 billion takeover by France's Saint-Gobain SA when the Swiss company's shareholders rejected a raft of proposals designed to ease the sale.

A proposal by Schenker-Winkler Holding AG, the investment vehicle controlled by Sika's founding family, to oust Sika Chairman Paul Hälg and two other directors who have opposed the deal was defeated by nearly 87% of shareholders in a vote.

An attempt to replace Mr. Hälg with Max Roesle, a representative of SWH, was also rejected at an extraordinary general meeting held in Baar, central Switzerland.

"The result confirms clearly that public shareholders are in full support of our actions," said Mr. Hälg. "We are getting more public shareholders supporting us and our defense continues."

Mr. Hälg said he was impressed by the strong support shown for the board's actions.

"Never was there such wide resistance against the transaction as today from foreign and local investors, politicians and managers. Our support is increasing and I feel clearly more optimistic than I did in January."

The meeting is the latest chapter in Sika's founding family's efforts to sell their stake to Saint-Gobain in a deal which would hand control of the Swiss company to the Paris-based construction materials giant.

Saint-Gobain unveiled its offer last December when it announced an agreement to pay 2.75 billion Swiss francs for SWH, which holds 16% of the share capital and carries 52.9% of the voting rights.

The move sparked opposition when Saint-Gobain said its offer wouldn't be extended to the other shareholders in Baar-based Sika, a maker of chemicals used in the construction and automotive industries.

Mr. Hälg and the other directors had opposed the proposed takeover, saying it doesn't make business sense. They responded by reducing the voting rights of the family to 5%, saying they were working in a group with Saint-Gobain.

This decision and others are now being contested in court proceedings that are expected to continue into 2016.

Sika also said its battle to remain independent was also strengthened by its better-than-expected first half earnings that were released earlier on Friday.

The company said net profit in the six months to June 30 rose 11% to 197.3 million francs, despite a 1.2% fall in sales to 2.63 billion francs as the strong franc reduced the level of overseas sales.

"The results support us, and it removes the argument that we don't focus on the business," Mr. Hälg. "The history of Sika has shown we don't need a strategic partner for our success."

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