Sika Heads Into Next Stage of Takeover Battle With Proxy Support

Swiss chemicalmaker Sika AG won the support of major proxy firms advising shareholders on how to vote at a forthcoming investor meeting, where members of the founding family hope to oust board members blocking a sale of the company to Cie. de Saint-Gobain SA.

zRating, Ethos, Glass Lewis & Co. and Institutional Shareholder Services Inc. recommend shareholders reject the Burkard family’s proposal to oust Chairman Paul Haelg and two other board members, according to documents seen by Bloomberg. They also suggest voting against the Burkard’s candidate for the chairman role and a board seat, Max Roesle.

The proxy firms’ stance is a blow for the Burkard family, who called the July 24 vote to push through their plan to sell a 16 percent stake with majority voting rights to Saint-Gobain for 2.75 billion francs ($3 billion). The 80 percent premium deal has irked other minority investors left out, while Sika management claim it hands the company over to a competitor at a fraction of the fair price.

Saint-Gobain was already forced to extend their agreement with the Burkards to mid-2016, leaving Sika caught in the crossfire amid a myriad of law suits filed by the family as well as counter claims made by disgruntled shareholders such as the Bill & Melinda Gates Foundation Trust. The legal battle now threatens to last years rather than months unless an alternative solution is found.

Sika also won the backing of the proxy firms to reinstate the pay of board directors. In a sign that the Burkard’s more than 100-year involvement in Sika is ending on an acrimonious note, the descendants of the founder used their majority voting rights to push through a proposal at the annual shareholders’ meeting on April 14 to stop paying the executives.

On decisions crucial to the future of Sika, the Swiss company restricted the Burkards to a 5 percent say at the annual meeting, a move that's likely to be repeated when votes are cast later this month.

Shares of the maker of mortars, sealants and concrete additives traded 0.3 percent higher at 3,470 francs as of 11:23 a.m. in Zurich.

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