Swiss Court Affirms Restriction on Sika Shareholder's Voting Rights

By John Revill 

ZURICH--A Swiss court affirmed a restriction on the voting rights of a large shareholder in Sika AG on Monday, handing the industrial adhesives maker a victory in its efforts to fend off a hostile takeover by Saint-Gobain SA.

In a summary decision, the Cantonal Court in Zug upheld a decision by Sika's board to cap the voting rights of the founding Burkard family at 5%, well below the stake's original weight of more than half the voting rights, Sika said. The family previously was exempted from a company rule that limited all shareholders' voting rights to 5%.

The Burkard family, which is trying to sell its stake to Saint-Gobain for 2.75 billion francs ($2.82 billion), own about 16% of Sika's shares. Saint-Gobain is willing to pay a premium of roughly 80% because the shares hold 52.9% of the company's votes. The French construction materials giant isn't extending its offer to other Sika shareholders.

The court's decision creates a new obstacle for Saint-Gobain and the family, which have been opposed by Sika's board and management. In January, the board restricted the family's voting rights, which had been granted because of the family's pledge to protect the company from takeovers, because it wanted to sell to Saint-Gobain.

Schenker-Winkler AG, the family's holding company, said in a statement that the decision didn't affect the validity of its agreement with Saint-Gobain. Schenker-Winkler also said that it can apply for another legal decision to restore its voting rights or ask the court to overturn decisions made at the Sika annual meeting.

Sika's annual general meeting is scheduled for April 14.

Sika said that it welcomed the court's decision and would analyze it in detail.

A spokesman for Saint-Gobain said that the company was sticking to the timetable of its takeover of Sika and expects to complete the transaction in the second half of 2015.

Shares of Sika jumped 10% in value immediately after the announcement. In early afternoon, the stock was up nearly 6.2% at 3764 Swiss francs.

Sika management has rebuffed efforts by Saint-Gobain to smooth relations, arguing that the deal doesn't treat all shareholders fairly. Sika has also said that it would get lost inside a conglomerate as big as the French giant.

Write to John Revill at [e-mail]

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