Clariant Shares Rise on Expiry of SABIC Governance Agreement

   By Ed Frankl 
 

Clariant AG shares climbed on Tuesday after the company said it would end its governance agreement with its largest shareholder Saudi Basic Industries Corp. at its June 24 annual general meeting.

The move means Clariant and SABIC will no longer form a group regarding the attribution of voting rights, the Swiss specialty-chemicals company said.

The companies entered into the agreement in September 2018 when SABIC became Clariant's anchor shareholder.

Shares in Clariant at 0815 GMT were up 8.5% at CHF18.76.

The expiration of the agreement means SABIC can now go beyond its current 31.5% stake and potentially launch a takeover bid, and can nominate more than four supervisory board members to Clariant, Baader Helvea analysts say in a research note.

"Clariant is the most obvious takeover target in the sector," the analysts say, noting its cheap valuation, the market being in a consolidation phase, and chemical-processing catalysts profiting from high energy prices.

"We are confident on SABIC's support in the spirit built over the years," Clariant Chairman Guenter von Au said.

Clariant also confirmed its 2025 targets, including compound annual sales growth of 4%- 6%, operating profit margin of 19%-21% and free-cash-flow conversion of around 40%.

The Basel-based company added that it will report its 2021 results on May 19, and for the first quarter of 2022 on June 15, following delays after a probe into accounting irregularities.

Clariant ended up restating its 2020 earnings, and said Chief Finance Officer Stephan Lynen would step down to be replaced by Bill Collins in July.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

May 17, 2022 04:48 ET (08:48 GMT)

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