The business week in review
In what was a shortened trading week because of the Easter holiday, dealer attention was focused on the escalating war of words between InCentive Capital and its prospective takeover target, the Swiss engineering group, Sulzer.
Sulzer’s top management broke into an investors’ roadshow to come back to Zurich on Monday to formally declare their rejection of the SFr4 billion ($2.4 billion) hostile bid. Sulzer believes the offer undervalues the company.
InCentive, which is owned by financier Réné Braginsky, upped the stakes last week by increasing its offer for Sulzer’s industrial operations by SFr20 to SFr430 per share.
InCentive accuses Sulzer of failing to deliver an adequate return to shareholders. Sulzer rejected these claims, pointing to its planned spin-off of its Sulzer Medica subsidiary.
By Tuesday attention had turned to the telecommunications sector, where the country’s largest telecom group, Swisscom, revealed that net earnings were up 32 per cent at SFr3.2 billion ($1.9 billion).
Operating earnings fell by a 26 per cent to SFr1.8 billion, but net profit was higher, thanks to sale of Swisscom’s Cablecom subsidiary.
Operating earnings were hit by increased competition and pressure on prices within the sector. However, the company said it should manage another healthy hike in net numbers this year because of revenues from the sale of part of its property portfolio along with the disposal of a 25 per cent chunk of its mobile communications business to Vodafone.
Swisscom wasn’t the only telecom group reporting on Tuesday. Troubled telecom technology group, Ascom, also reported a decline in its net income, blaming higher marketing and research costs for the disappointing performance.
The company’s net profit for 2000 was down almost a quarter to SFr67 million ($39 million) on sales of SFr3.1 billion.
Meanwhile, the country’s largest life insurer, Swiss Life, had reason to smile on Wednesday as it unveiled results that showed net profit more than doubling in the year 2000. Net profit came in at SFr924 million ($541 million) on the back of a 49 per cent increase in financial earnings.
The troubled airline conglomerate, SAirGroup, was back in the news as Zurich’s director of public prosecutions decided on Tuesday to open an investigation into the company following last year’s massive losses.
The probe could lead to criminal charges being brought against SAirGroup, which owns Swissair.
Zurich’s director of public prosecutions, Hanspeter Hirt, told swissinfo that the enquiry would focus on the group’s presentation of its account to determine whether it gave an accurate picture of the real situation the company was facing.
by Tom O’Brien
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