(Bloomberg) – Sika AG’s founding Burkard family remains committed to selling its $3 billion-stake in the adhesives maker against the company’s will, saying it would be impossible to go back on the deal with Cie. de Saint-Gobain SA even if they wanted to.
“A contract is a contract, it’s signed and legally binding and we need — and want — to stick to it,” Urs Burkard, the family member that’s orchestrating the deal for his siblings, told Bloomberg in an interview in Zurich.
Saint-Gobain is the only party that can pull out, Burkard said. The family would pursue the current deal as it stands, even if it did have the option to exit. The family can’t change the terms of the contract without Saint-Gobain, he said.
Burkard’s stance dashes hopes for a swift conclusion to the ’’soap opera’’ feud that has erupted over the sale of the 16 percent stake with majority voting rights. A battle between the Burkards and Saint-Gobain against Sika management and investors left out of the 80-percent-premium offer is set to wind its way through the courts, taking years to resolve.
The French company already had to extend the deadline for the transaction by a year as each side brought legal suits against the other. It can next walk away from the deal without penalty in June 2016, or opt to extend for another year.
“Under no circumstance can Saint-Gobain be forced to purchase the shares” belonging to the Burkard family’s investment vehicle, Schenker-Winkler Holding, if its stake in Sika doesn’t carry majority voting rights or if the deal triggered a mandatory offer to all Sika shareholders, a Saint- Gobain spokesperson said.
The plan to sell the stake has upset investors, politicians and managers, who addressed board member Burkard directly at a Sika extraordinary general meeting and voiced their frustrations. Sika’s executives have said the combination makes no strategic sense as the two companies are competitors. Some shareholders including Cascade Investment LLC and the Bill & Melinda Gates Foundation Trust have entered the fray, and are suing Burkard for his part in the proposed deal, struck without Sika management’s knowledge. The Burkard’s majority voting rights have been curtailed to just 5 percent on key votes strategic to the company, such as a move to oust the chairman and executives blocking the deal.
“It’s also about whether the two parties in the contract are finally ready to recognize the fundamental deficiencies of the transaction and adjust the contract accordingly,” said Sika spokesman Dominik Slappnig.
Sika’s board said in June that it has drawn up alternative proposals to the Saint-Gobain deal including a buyout of the family shares.
“Any demands to rethink the contract with Saint-Gobain are out of the question,´´ said Burkard, the descendant of Sika founder Kaspar Winkler. ‘‘We feel very confident about our legal position. With my shares, I can do whatever I want. We are still in Switzerland.´´