Sulzer sees orders rise amid takeover worries
The technology corporation, Sulzer, says first quarter orders are up six per cent to SFr1.5 billion ($893.3 million). The news comes ahead of a decision by shareholders on whether to accept a hostile takeover bid for the company by financier, René Braginsky.
The Winterthur-based company said the rise was “mainly attributable to Sulzer industries core business on which Sulzer will be based in the future” and that it expected “an ongoing positive trend in order intake for the current year”.
Sulzer, which is facing a hostile bid attempt from Swiss investment group InCentive, has been under pressure to boost profitability on the industrial side of the business.
Both Sulzer and InCentive would spin off the already successful Sulzer Medica group, leaving only the core industrial activities.
Sulzer has already said it plans further divestitures on the industrial side, separating core businesses from ones it intends to sell.
On Tuesday Sulzer said that orders in these core businesses totalled SFr533 million over the first quarter, rising 20 per cent when adjusted for acquisitions, divestments and currency fluctuations.
Sulzer also said orders for Sulzer Medica rose by one per cent on an adjusted basis to SFr360 million. In its orthopedics division, the recall of defective hip replacement joints led to a slight decrease in hip replacement sales in the United States “but this was more than compensated by steady growth in other areas,” it said.
Shareholders will have to decide at Thursday’s annual general meeting in Winterthur whether or not to approve the hostile board takeover being forced by InCentive.
In a related development, one of Switzerland’s largest trade unions, the Industry, Construction and Services Union, has warned that InCentive could dismantle the group if it gained control of Sulzer.
At a news conference in Zurich, the union said that as a result of its fears, it was urging pension funds and other institutional investors not to sell their Sulzer shares to InCentive.
The union added that InCentive was not a trustworthy alternative to the present Sulzer management, which it described as the lesser of two evils.
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