Burkard family lodges appeal against Sika AGM vote

Sika is embroiled in multiple legal actions Keystone

The blizzard of legal actions surrounding the proposed takeover of Swiss firm Sika by Saint-Gobain was ratcheted up a notch this week as the Burkard family asked a Zug court to overturn votes at the company’s annual general meeting.

The five Burkard family members – who are descendants of the firm’s founder – hold 16% of the company’s shares, but 52% of voting rights thanks to the preferential nature of their stock. The Sika board reduced the family’s vote to just 2.6% on certain agenda items at the AGM last month.

Schenker-Winkler Holding (SWH), the vehicle that holds the family’s shares, confirmed to swissinfo.ch that it had lodged an appeal against the AGM voting restriction at the Zug cantonal court on Tuesday, May 26.

The controversial decision effectively blocked the Burkards from installing new board members who would have been in favour of the takeover deal.

If successful, the legal complaint would overturn the election of several Sika board members and possibly nullify all legally binding decisions taken by the board since the AGM, a person familiar with the legal action told swissinfo.ch. In such an instance, it is entirely possible that another shareholder meeting would have to be called, the person said.

Deal remains on table

The face-off between the Burkards and the Sika board started last December when the family announced it would sell its shares to French industrial conglomerate Saint-Gobain for an inflated price of CHF2.7 billion ($2.9 billion).

Thanks to an opt-out clause in Sika’s articles of association, Saint-Gobain would not be required to offer the same generous terms to other shareholders despite taking over more than a third of Sika’s voting rights.

The Zug courts have been especially busy with this contentious case in the last few months. SWH is still awaiting the verdict of an appeal to a previous ruling, lodged before the AGM, on whether their voting rights could be restricted.

On May 15, SWH also started proceedings to sue three Sika board members for allegedly wasting the company’s money in opposing the proposed Saint-Gobain deal.

Sika has stated that the SWH action is “counterproductive”.

On the other side of the argument, the Bill & Melinda Gates Foundation – a significant Sika shareholder that is opposed to the takeover – lodged an appeal earlier this month with the Federal Administrative Court that would prevent the company from using its opt-out clause in the Saint-Gobain case.

Despite the legal confusion, that could last months or even years, Saint-Gobain have held their offer for Burkard shares open until June of next year.