Sika shareholders continue takeover bust-up

Bill and Melinda Gates are opposed to the Burkard sale Keystone

The ongoing conflict between shareholders of Swiss chemicals manufacturer Sika continues unabated with the Bill & Melinda Gates Foundation aiming to take a contentious takeover bid to the courts yet again.

The foundation, which has invested in Sika, will appeal a decision by the Swiss financial regulator earlier this month that would allow the Burkard family to sell their stake to Saint-Gobain whilst denying other shareholders the same generous terms. 

The Swiss Financial Market Supervisory Authority (FINMA) ruled on May 4 that the opt-out clause in the company’s articles of association is valid. According to the Sika website, the Bill & Melinda Gates Foundation will appeal this verdict to the Federal Administrative Court. 

The opt-out clause would allow more than a third of voting rights to change hands without triggering a similar offer for the remaining shares. The Burkards (decendants of Sika’s founder) hold 16% of shares that come with 52% of voting rights thanks to their preferential nature. 

In December the Burkards announced they would sell to the French industrial conglomerate without first consulting Sika’s board. This sparked a fierce battle between the Sika board and many shareholders lining up against the Burkards. 

A seven-hour fractious annual general meeting last month saw the battle brought to a new level. Sika managed to block the election of Burkard-friendly board members by restricting the family’s voting rights on specific items on the agenda. The Burkards are expected to challenge the votes in court. 

On May 15 it was reported that the family struck the first legal blow by suing three Sika board members for spending a “disproportionate” amount of the company’s money on fighting the proposed CHF2.7 billion ($2.9 billion) share sale.

These board members are facing the double whammy of being sued whilst receiving no pay for their work this year. No directors will be paid in 2015 after shareholders turned down the company’s proposed board compensation package in a binding vote at the AGM.