Photographer: Krisztian Bocsi/Bloomberg

Stada Delays Annual Meeting as Activist Battle Escalates

Updated on
  • Stada postpones shareholder meeting scheduled for June 9
  • Company brings forward by two years process to renew board

Stada Arzneimittel AG, the German generic-drug maker targeted by shareholder activist Active Ownership Capital Sarl, postponed its annual general meeting scheduled for June 9, striking back at attempts to impose swift change on the supervisory board.

Stada, based in Bad Vilbel, brought forward by two years plans to renew the supervisory board and said it will now hold the annual meeting on Aug. 26, according to a statement to the stock exchange on Sunday. It hired external advisers and expanded a nomination committee chaired by supervisory board member Dieter Koch, 79.

Germany’s largest maker of generic drugs was urged by Active Ownership Capital on May 9 to replace five board members and remove a restriction on the transfer of shares. The activist, which holds about seven percent of the voting rights through direct and indirect stakes, is pushing for change at Stada, which has had the same chief executive officer for the past 22 years. Stada sells cheaper copies of the erection pill Viagra and the painkiller Voltaren, among other products.

‘Crucial Renewal’

“With this decision, Stada has regained control over the supervisory board election process and consequently the process of electing management,” Ulrich Huwald, an analyst at Warburg Research in Hamburg, said in a note to clients. “It becomes obvious that management changes at Stada or strategy changes, including a potential sale of parts of its business like generics, will take time.”

Stada shares rose as much as 1.4 percent in Frankfurt, trading up 0.7 percent at 44.55 euros as of 12:44 a.m. The stock has climbed 19 percent this year, compared with a 2.2 percent decline in the MDAX Index for medium-sized companies.

“As a long-term oriented investor, Active Ownership Capital welcomes the fact that Stada has accepted our proposal for the crucial renewal of the supervisory board,” the shareholder said in an e-mailed statement on Monday. “We assume that the supervisory board, as is common in Germany, will be completely newly elected at the next AGM. We look forward in this context to a continued dialog with the company.”

Florian Schuhbauer, a managing partner who founded Active Ownership in 2014 with former banker Klaus Roehrig, buys minority stakes in undervalued publicly traded companies in Germany, Austria, Switzerland and Scandinavia with funding from European family offices and selected institutional investors, according to the company’s website.

Active Ownership originally sought the dismissal of Supervisory Board Chairman Martin Abend, board members Koch, Eckhard Brueggemann, K.F. Arnold Hertzsch and Constantin Meyer, proposing Julia Barth, Norbert Klusen, Klaus-Joachim Krauth, Ulrich Wandschneider and Roehrig in their place.