Sulzer urges shareholders to reject InCentive bid
The battle for the engineering technology group, Sulzer, intensified on Monday as the board called a news conference to reject the hostile bid by the investment company, InCentive Capital.
Sulzer’s recently appointed chairman, Leonardo Vannotti, told swissinfo that the InCentive bid is “too low and doesn’t correspond to the value of the enterprise”.
On Friday, InCentive Capital, which is owned by financier Réné Braginsky, increased its offer for Sulzer’s industrial operations by SFr20 to SFr430 per share.
It also sweetened its paper bid by upping the ratio of InCentive for Sulzer shares and by providing capital protection for investors who accept the offer.
Sulzer, the 166-year old former flagship of Swiss engineering, says the improved price still undervalues the company.
It says the bid puts no value on Sulzer’s prospects and that InCentive shares were overvalued and illiquid, making them an unattractive alternative to Sulzer’s.
“It’s not clear to me what they (InCentive) really intend to do with Sulzer,” explained Vannotti. “I’m surprised because when I want to buy something I generally know what I want to do with it.”
InCentive argues that Sulzer’s management has failed to generate enough return for shareholders and that a new board including Braginsky could do better.
InCentive’s offer begins on April 17, two days before the start of Sulzer’s annual general meeting.
Sulzer Medica
Sulzer has itself launched a major reorganisation of the firm and has announced its intention to spin off its majority-owned medical technology unit, Sulzer Medica.
“We have tried to explain that we have a company with a lot of substance and we’re trying to exploit this substance by improving the results,” said Vannotti. “We are concentrating on four areas that have shown growth in the past five years and are expected to show more growth in the future.”
Sulzer said the SFr4 billion ($2.35 billion) bid came nowhere near the company’s real value. It said InCentive’s cash offer only valued the group’s core businesses at 4.2 times their 2000 EBITDA earnings.
Sulzer also pointed out that its commercial fuel cell technology business, Hexis, which it is due to sell off, has failed to attract any added value within the InCentive offer.
Two weeks ago, Ueli Roost stepped down as chairman of Sulzer to make way for the known trouble-shooter, Leonardo Vannotti.
swissinfo with agencies
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