Sika and Saint-Gobain shares dip over takeover
(UPDATE) A plan by French building materials giant Saint-Gobain to take over Swiss rival Sika on the cheap caused shares in both companies to plunge on Monday.
Saint-Gobain unveiled a plan to take over Sika by buying a stake that would give it a majority in the company which produces chemicals used in construction, but without conducting a public offer for remaining shares.
Saint-Gobain said it had agreed to pay 2.75 billion Swiss francs (some 2.3 billion euros) for the 16.1 percent stake held in Sika by the Burkard-Schenker family which founded the company.
That would give Saint-Gobain 52.4 percent of voting rights in the firm, and would not force it to launch a public offer for the remaining shares that would force it to spend considerably more.
The price Saint-Gobain offered was an 80 percent premium to the closing price of Sika's shares on Friday.
In Switzerland a company taking over a publicly-listed firm does is notrequired to make a public offer for remaining shares when taking over majority control.
Deal makes no sense
The deal was not well received by Sika's board of directors, which said in a statement on Sunday it makes "no industrial sense".
Sika board chairman Paul Haegl said the board would seek other alternatives to Saint-Gobain taking over the company.
"We're only just beginning" this process, Haegl told AFP.
Traders didn't welcome the dispute, pushing down Saint-Gobain's share price 6.2 percent to 34.91 euros on a market down 1.0 percent overall.
Sika's shares plunged 22 percent to 3,033 francs in a market down 0.31 percent overall.
Saint-Gobain CEO Pierre-André de Chalendar said he was "extremely surprised" by the reaction, adding that the group had pledged to retain Sika's current management.
"At this stage I will not explain myself. There must be emotional aspects that I don't understand," he said, asserting that there had been "a reversal in attitude over the weekend that we learned of yesterday (Sunday)".
He added: "The family decided to sell its stake, and to do so it set in motion a process that was both competitive and confidential."
Saint-Gobain, which employs nearly 193,000 people worldwide, had been pursuing the operation in the utmost secrecy, and hopes to complete it in the second half of next year.
Sika, which employs 16,000 people, had a turnover of 5.1 billion Swiss francs last year.
De Chalendar said the merger would produce synergies worth 100 million euros from 2017 and 180 million euros from 2019.
Saint-Gobain also said it plans to sell its glass packaging unit Verallia before next summer.
"We have received many inquiries and we think the time has come," de Chalendar said.