Sulzer rejects InCentive bid

InCentive's René Braginsky wants to unlock Sulzer's potential Keystone Archive

The Swiss technology corporation, Sulzer, has once again rejected a hostile stock and cash bid by the investment firm InCentive Capital, saying the offer undervalued the company.

The bid from InCentive, which says it controls around 15 per cent of Sulzer, calls for Sulzer shareholders to get two shares in medical technology unit Sulzer Medica plus SFr410 in cash or 0.9 InCentive shares per Sulzer share.

InCentive, which formally launched the bid on Friday, is also proposing that former ABB vice-chairman Eberhard von Körber take the position of chairman on Sulzer’s board.

Sulzer, based in Winterthur, said in a statement that the cash component of the InCentive bid was not actually SFr410 ($237.40), but in fact SFr390 because InCentive planned to deduct the SFr20 dividend due to be paid on April 26. It also maintained that InCentive controlled only 5.4 per cent of group shares.

InCentive Capital’s chief executive, René Braginsky, has promised to take control of the Sulzer board at the April 19 annual meeting.

In a statement, Braginsky said that InCentive was launching its tender offer because it believed it was obligated as the largest shareholder to step in and make changes during a difficult time for the company.

“The development of the business and Sulzer’s share price performance have been very unsatisfactory for years,” he said.

Sulzer said that Zug-based InCentive should not be able to win control of the board by nominating its own team of directors before shareholders decide whether to accept its bid.

In its defence Sulzer has taken out an information campaign in the Swiss and international press to encourage shareholders to reject the offer.

As part of this defence the company has been plugging its Hexis project for stand-alone fuel cells generating heat and power in single-family homes.

InCentive’s offer is aimed at forcing Sulzer to become more focussed and unlock value, which Braginsky says the current management has failed to do.

Both sides aim to spin off listed medical devices firm Sulzer Medica, seen as the diamond in the company’s crown. Sulzer owns 74 per cent of Medica and is offering shareholders two Medica shares in the demerger planned for August.

swissinfo with agencies