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Small investors to challenge Feldschlösschen sale

There could be more than just a storm in a beer glass when shareholders of the country's largest brewer, Feldschlösschen-Hürlimann, meet in Basel on Monday.

A group of small investors is going to vigorously challenge a plan by the board of directors to sell off the company's beverage business whose performance it considers "unsatisfactory".

One of the leading opposition voices is Maximilian Reimann, a member of the Swiss People's Party who represents canton Aargau in the Swiss Senate. He says that last year's company profit of SFr53 million in a stagnating beer market was a good result.

"You have to draw the conclusion that Feldschlösschen is by no means as shaky as the board of directors maintains. These people seem to understand more about finance than about industry and production. With the sale of the beverages division, they are taking the line of least resistance," Reimann says.

He has proxy for several thousand votes at the shareholders' meeting and needs a third of the votes cast to block the sale. After three weeks of what he calls "defensive battle" against the plans, Reimann says he is increasingly confident that the board will not achieve the two-thirds majority it requires.

The board has argued that the development of the beverages business is characterised by a continuing decline in beer consumption, eroding profit margins, and production and excessively high distribution costs.

The new chief executive of the Feldschlösschen Group, Christof Zuber, says the beverages business could maintain and even expand its strong market position in Switzerland. However, to achieve this, Feldschlösschen would have to transform itself from a producer and distributor of beverages to a company providing services as a partner to the restaurant and commercial sectors.

"Such a process would be associated with a substantial cost in terms of time and investment, and possibly, on a temporary basis, with further earnings and market share difficulties. Without the support of a strong industrial partner, reorienting the company to these changed market conditions is not possible," the company insists.

These were the reasons why the board asked Credit Suisse First Boston to search for an internationally successful firm to buy the division and manage it successfully in the long term.
The plan is to select the new owner by means of an international auction.

If the sale is approved, Feldschlösschen-Hürlimann Holding will remain as a pure real estate company quoted on the Swiss Stock Exchange.

swissinfo with agencies

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