Saint-Gobain urged to extend Sika offer

Gates Foundation and Cascade joint management's call for Saint Gobain to roll out terms of its hostile takeover bid to all shareholders

Sika AG's plant in Zurich
Sika AG's plant in Zurich

The Bill and Melinda Gates Foundation Trust (Gates Foundation) and Cascade Investment (Cascade) have called on Saint-Gobain to extend the terms of its hostile takeover bid for construction chemicals giant Sika to all of its shareholders.

Saint-Gobain agreed a deal with the founders of the Sika business, the Burkard family, to buy out its share in a deal worth $3.2bn. Although the family only owned a stake of 16.1% in the company, for historic reasons these shares carried 52.4% of the voting rights.

Sika's current management team has objected to the takeover, arguing that it could be detrimental both to the company and to rest of the company's shareholders.

Two of those, the Gates Foundation and Cascade, have put in requests for the Swiss Takeover Board to rule that Saint Gobain should be obliged to make a public tender offer for the rest of the shares.

Between them, Gates Foundation and Cascade own around 3% of Sika's voting rights and are long-term shareholders in the business.

This is the second proceeding to go before the Swiss Takeover Board regarding Saint-Gobain's intended hostile takeover. A ruling made in the first case on 5 March, said that the use of an opt-out clause which would preclude a buyer from having to make a full offer for all of a company's shares was valid "in principle".

However, the board left its decision open as to whether such a clause could be invoked in this case or whether it would have to make a public offer for all of the shares.

Saint-Gobain is one of the biggest building materials companies in the world. It is behind the Gyproc dry wall business, as well as a number of glass, insulation, pipes and industrial mortars businesses.

Saint Gobain achieved a 2.2% increase in like-for-like sales for 2014 of $44.5bn, while net income grew by 60% to $1.03bn. The company said that it expects to finalise its acquisition of Sika during the second half of 2015 and that it can generate synergies of around €100m ($108m) by the end of the second year of its ownership and €180m ($195m) a year from 2019.

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