Germany’s Stada Urged by Investor to Replace Five Directorsby
Active Ownership also proposes ending transfer limits on stock
Proposals submitted for annual shareholder meeting on June 9
Stada Arzneimittel AG, Germany’s largest maker of generic drugs, was urged by one of its top shareholders to replace five board members and remove a restriction on transfer of shares.
Active Ownership Capital Sarl proposed the changes, which would include getting one of its representatives on the board, as a supplementary motion for the annual shareholders meeting on June 9, the Frankfurt-based investor said in a statement on Monday. The investment company is also seeking to reclassify Stada’s registered shares, which can currently only change hands with the board’s consent.
Active Ownership bought a minority stake -- according to a March filing with regulators -- to push for change at Stada, which sells cheaper copies of the erection pill Viagra and the painkiller Voltaren and has had the same chairman at the helm for 22 years. The stock has rallied about 5 percent since the German daily Frankfurter Allgemeine Zeitung reported the investment on May 2.
Shares of Stada rose 1.9 percent to 40.49 euros as of 4:38 p.m. in Frankfurt trading. The stock has advanced 8.4 percent this year. A spokesman for the company didn’t immediately respond to a call seeking comment.
Active Ownership is seeking the support of London-based hedge funds to press for corporate governance changes and value-creation through mergers, according to the FAZ report.
Managing partner Florian Schuhbauer became Stada’s second-largest shareholder with a 5 percent stake by the end of March, according to data compiled by Bloomberg. He founded Active Ownership in 2014 with Klaus Roehrig, a former banker, to buy minority stakes in undervalued publicly traded companies in Germany, Austria, Switzerland and Scandinavia.
Active Ownership is seeking the dismissal of Dr. Martin Abend, Dr. Eckhard Brueggemann, Dr. K.F. Arnold Hertzsch, Dieter Koch and Constantin Meyer from Stada’s supervisory board. The investor proposes adding Julia Barth, Dr. Norbert Klusen, Klaus-Joachim Krauth, Dr. Ulrich Wandschneider and the firm’s own Roehrig in their place.
“Stada has evolved from a generics manufacturer operating in Germany, which primarily marketed its products to German pharmacies, to a global pharmaceutical company with an international client base without adapting the competencies of its Supervisory Board accordingly,” Active Ownership said in the statement. “A strengthened Supervisory Board is a first major step to developing the company further together with the management.”
Stada has faced takeover speculation for years, though it hasn’t disclosed any formal approaches recently.