Sika AG’s management has a chance of resolving a standoff with family shareholders over control of the Swiss construction materials company this year, according to shareholder adviser group Ethos which represents pension funds managing a combined $220 billion.
A deepening legal battle has delayed the Burkard family’s plan to sell their 16 percent stake with majority voting rights to Cie. de Saint-Gobain SA and pressure will build on them to consider alternatives such as a management buyout, Dominique Biedermann, chairman of Ethos, said in an interview Wednesday.
“At some point, they will have had enough and it will be possible to find a solution,” Biedermann said, speaking at Bloomberg’s office in Geneva. “We hope this will be before the end of the year.”
Saint-Gobain’s bid has erupted into a battle between the descendants of Sika founder Kaspar Winkler and management, who say the combination makes no strategic sense and gives the Burkards an 80 percent premium while other shareholders get nothing. Cascade Investment LLC and the Bill & Melinda Gates Foundation Trust are suing board director Urs Burkard for his part in the proposed deal, put together without Sika management’s knowledge.
Sika Chairman Paul Haelg said June 24 he’s much more confident about fending off Saint-Gobain’s hostile move than at the start of the year.
While the Swiss adhesives maker has drawn up alternative proposals to the Saint-Gobain deal worth about 2.75 billion francs ($3 billion), it has yet to make headway in persuading members of the founding Burkard family to consider them, Haelg said at the time.
“The problem is the family wants 2.8 billion and this is exaggerated,” Biedermann said. “Nobody will pay an 80 percent premium. So you need to find another arrangement. Maybe not at 2.8 billion but at 2 billion.”
The court process threatens to delay the deal for years, said Vincent Kaufmann, chief executive officer of Ethos.
The case is a “legal imbroglio,” Biedermann said.