Investment firm makes surprise bid for Sulzer

Sulzer is facing a surprise takeover bid swissinfo.ch

The industrial holding group, Sulzer, is facing a takeover bid from a Swiss-based investment firm, InCentive Capital, worth SFr4.4 billion ($2.6 billion).

Shares in Sulzer, under pressure of late, were given a boost by the news, moving 6.6 per cent higher at one stage on the Zurich bourse.

Under the deal, announced on Monday, InCentive will bid for all the shares it doesn’t yet control. Currently it is Sulzer’s largest shareholder with 15 per cent of Sulzer’s stock.

Zurich Kantonalbank analyst Carla Barella told swissinfo:

“I see it as a move of a disapointed shareholder who wants to give a kind of wake up call to the management to go ahead with the split-up strategy.”

The offer values Sulzer’s core industrial business at a premium of over 40 per cent, InCentive said.

“The premium offered is actually pretty low in real terms,” said Barella. “What I think is positive is the pressure put on Sulzer management to go on with the split-up strategy.”

The offer will be formally unveiled on March 30. However InCentive has said the deal is dependent on its achieving a “tax neutral” split between Sulzer and Sulzer Medica, the separately listed medical technology group in which Sulzer controls 74 per cent of stock.

Last year Sulzer’s plan to merge with its medical unit was thwarted by shareholders who moved out of the stock in protest.

Sulzer refused to comment directly on the offer, saying only that it came as a surprise, and the company is currently formulating its response.

“I guess Sulzer will come up with an alternative,” explained Barella. “I’m sure that’ll look pretty much the same with a slit-up dividing Sulzer Medica from Sulzer Industries.”

The offer period for the deal is expected to run from April 17 to May 15, with InCentive needing a total of 67 per cent of Sulzer’s shares to take over the company.

swissinfo with agencies