A $7 Billion Takeover Deal Could Come Down to Turnout at Shareholder VoteBy
Chemical maker considering early announcement of EGM date
Low turnout could tip scales in favor of activist White Tale
With weeks to go before Clariant AG shareholders flock to a Swiss conference center to vote on the $7 billion takeover of Huntsman Corp., Chief Executive Officer Hariolf Kottmann is pulling out all the stops to get his way and defeat an activist investor group seeking to kill the deal.
Aware a low turnout could harm the Swiss company’s chances of garnering the majority vote required, Clariant has identified ways to help boost attendance, including announcing the date of the vote sooner than legally required to give more time to reach out to small, retail shareholders, according to a person familiar with the situation. The meeting is expected to take place in November.
Uncertainty about the all-share tie up crystallized after activist investor Corvex Management and 40 North, which together hold a stake in Clariant of more than 10 percent, said more value could be created through alternatives. The Muttenz, Switzerland-based company and Huntsman have already doubled down on efforts to reinforce the deal by hiring Goldman Sachs Group Inc. to help convince shareholders of the tie-up’s merit, as well as forming a steering committee of company managers to review merger plans at the end of August.
Rallying stalwart Clariant investors is key. The Swiss company has seen the proportion of holders attending its annual general meeting decline for the last three years to just 53.64 percent of share capital for the 2017 investor day, down from 57.07 percent in 2015. The burden to get the deal approved by shareholders lies with Clariant, which must win more than two thirds of the votes cast on relevant agenda items in order to move ahead with its plans, the company’s articles of association show.
While Clariant says the combination with Woodlands, Texas-based Huntsman is supported by its largest Sued-Chemie family shareholder group, which holds a stake of 13.96 percent in the company, White Tale has been increasing its holdings of the chemicals maker.
“Our time expectation has not changed,” Clariant spokeswoman Claudia Kamensky said in a statement. “The merger is proceeding as planned with an unchanged closing targeted around year end. For the invitation of the shareholders to the EGM,we will comply with statutory and legal requirements.”