Gates Foundation loses appeal in Sika takeover saga

A takeover was averted at Sika's annual general meeting on April 14 Keystone

Switzerland’s financial regulator has rejected the Bill & Melinda Gates Foundation’s appeal against the Burkard family's right to invoke a controversial opt-out clause over the sale of Sika shares to French firm Saint-Gobain.

The Gates Foundation, which is a Sika shareholder, was dealt the blow by the Swiss Financial Market Supervisory Authority (FINMA) on Monday. Along with their investment advisor Cascade Investments, the Foundation had appealed against a ruling by the Swiss Takeover Board on April 1 in favour of the Sika family’s right to an opt-out clause.

Normally, a buyer would have to offer the same price to all shareholders if they obtain more than a third of a company’s voting rights. But Swiss law allows some firms to sidestep this requirement with an opting out clause in their articles of association. Sika has such an opt-out clause.

This clause was invoked by Sika family to exempt Saint-Gobain from paying a premium to all shareholders.

In December last year, the Burkard family, descendants of Sika’s founder, made the shock announcement that they would sell their 16.1% stake in the company to French industrial conglomerate Saint-Gobain. They took the decision without consulting other shareholders or even the company’s board.

The Burkard stake, held on behalf of the family by Schenker-Winkler Holding (SWH), comes with preferential voting rights that command 52.4% of all votes in the company. This is why Saint-Gobain were prepared to pay such a premium price of CHF2.75 billion ($2.85 billion) – some 80% above market value of ordinary shares.