Control of Sika in legal limbo

An attempt by the family owners of Sika, a Swiss chemicals group, to sell their controlling stake in the company “has thrown them into a bitter battle with the company's directors and workers — and incensed international shareholders,”

the

Financial Times

reported.

The company's net sales for the first nine months of 2015 were $4.1 billion, the article said.

The family controls 52% of voting rights but only 16% of the share capital. It is selling its stake to French industrial group Saint-Gobain, which “has not made a comparable offer to other investors,” the article said.

Fourth-generation family member member Urs Burkard told the


FT


that he, his brother and three sisters decided to sell after their mother died in 2013. No next-generation member is interested in running the company.

After the deal was announced last December, the Bill & Melinda Gates Foundation Trust and Cascade Investment, which own more than 5% of Sika's share captial challenged an “opting out” clause that exempted Saint-Gobain from having to make a similar public offer to them. People close to the Burkard family told the


FT


that “opting out” clauses, which generally are used to enable family owners to increase their stakes inexpensively, are common in Switzerland and that the international shareholders were aware of the clause when they bought their shares. In September, the Swiss administrative court ruled in favor of the family and Saint-Gobain, the


FT


article said.

A second legal issue that has not been resolved concerns whether Sika's board can limit the family's votes at shareholder meetings, using a “restriction of voting rights” clause. Company executives warn of a culture clash and are uncomfortable about Saint-Gobain controlling the company with just 16% of the share capital.

Sika's fate is uncertain until the court's ruling on the restriction of voting rights, which is not expected until next year, the article said. (Source:


Financial Times


, Nov. 3, 2015.)