German generic drugmaker Stada said on Sunday it would propose its own new independent directors to join its supervisory board, countering nominations from investor Active Ownership.
Stada and the Luxembourg-based activist investor had appeared to reach a deal last week in which Active Ownership would seek to replace three candidates on the nine-member supervisory board, retreating from its initial demand to nominate five candidates and oust the chairman.
But Stada said a committee of its current supervisory board would now nominate at least three independent candidates. Three board member places are reserved for labour representatives, meaning that Stada management and Active Ownership must battle it out for the remaining six.
Stada postponed its annual shareholder meeting to Aug. 26 from June 9 to give itself time to find suitable candidates, and a Stada spokesman said Active Ownership’s proposal was now “formally off the table”, without elaborating.
But Active Ownership, which holds about 5 percent of Stada shares and a further 2 percent in options, indicated it would go ahead with its proposal at the AGM.
“We expect that the supervisory board will be newly elected in its entirety at the next AGM, as is usual in Germany. In this context, we look forward to further dialogue with the company,” it said in a statement.
Active Ownership has said it wants to add international expertise to help the German company, founded by pharmacists in the 19th century, realise its potential.
Stada shares have surged 19 percent this month on speculation Active Ownership’s campaign could lead to a sale or breakup of the company.
Active Ownership wants Klaus-Joachim Krauth, former finance chief of drugmaker Hexal; Ulrich Wandschneider, until recently chief executive of hospitals chain Asklepios Kliniken; and Active Ownership founding partner Klaus Roehrig to join Stada’s supervisory board.
It had said they should replace Eckhard Brueggemann, Arnold Hertzsch and Constantin Meyer.
Stada said in a statement: “The supervisory board’s nomination committee will place particular emphasis on the potential candidates’ relevant expertise and experience in the fields of generic pharmaceuticals and OTC (over-the-counter) products, their expertise in finance, audit and legal matters as well as on their personal independence.”
“Upon Stada’s request, the three candidates named in advance by Active Ownership Capital have advised that they will need a reflection period to consider taking part in the selection process,” it added.
Active Ownership’s other key demand, to cancel the limited transferability of registered shares, will remain on the agenda of Stada’s annual shareholder meeting.
Currently, such “vinculated shares”, under German securities trading laws, can only change hands with the consent of top managers or otherwise the shares lose their voting rights.
By Alexander Huebner; Writing by Georgina Prodhan
Source: Reuters
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