Emboldened Sika Seeks to Pitch Takeover Alternatives to Family

Sika AG Chairman Paul Haelg said he’s much more confident about fending off Cie. de Saint-Gobain SA’s $2.7 billion hostile takeover attempt now than at the start of the year.

While the Swiss adhesives maker has drawn up alternative proposals to the Saint-Gobain deal, it has yet to make headway in persuading members of the founding Burkard family to consider them, Haelg said. The Burkards, which agreed to sell Saint-Gobain their 16 percent stake with majority voting rights, lost an appeal to prevent Sika from restricting their influence, blocking a move to oust executives against the deal.

“I am very surprised that the Burkards don’t want to discuss alternative proposals with us,” he said on the sidelines of Sika’s investors day in Zurich today. “We have an alternative proposal ready and the family is aware of it.”

The court ruling in Sika’s favor and the entrance of an investment fund backed by Nassef Sawiris that’s agitating for the deal terms to be changed has given management a boost in a legal battle that threatens to extend into years.

Sika said alternative scenarios for Saint-Gobain could be a bid for the whole company or the integration of its Weber business with Sika’s mortar unit. The integration of the mortar businesses where both companies compete could lead to synergies of 150 million euros, Sika said.

The company has strong support from investors to further resist the deal.

“The decision of the superior court of Zug has given us much more confidence than we had in January,” Haelg said at the company’s investors day in Zurich. “The language of the court is very strong and we feel it’s in line with what we think.”

Buying out the family’s shares is probably not beyond Sika’s reach, Haelg said, without saying if that’s another viable option. Southeastern Asset Management, which has acquired an initial 3 percent of Sika’s share capital and the backing of the politcally and industrially influential Sawiris, manages $25 billion in funds.