Management of the Sulzer technology corporation in Winterthur have rejected a takeover bid made earlier this week by the Swiss-based investment firm, InCentive Capital.
A board shake-up has also been announced, with the current chairman and chief executive, Ueli Roost, leaving the two posts. However, he is to remain chairman of the Sulzer Medica board.
The current chief executive of Sulzer Industries, Fred Kindle, is to be appointed CEO of the new Sulzer.
The board of directors recommended on Friday that Sulzer shareholders should turn down the offer of SFr4.4 billion ($2.6 billion) made on Monday, arguing that InCentive Capital is not needed as a catalyst for realigning the company.
The offer is also considered too low.
A Sulzer statement said that internal changes were well underway and would create greater value for shareholders, employees and customers than the "short-term oriented procedure" of InCentive Capital.
It added that Sulzer would propose its own way of separating the corporation into an industrial and a medical devices group - an issue to be decided at the annual shareholders' meeting on April 19.
Sulzer said that the separation of Sulzer and Sulzer Medica, the complete realignment of Sulzer Industries now in progress and the measures taken to improve profitability were expected to have a positive effect on the share price without InCentive Capital.
The company said shareholders might receive significantly more for their shares if Sulzer retained control.
Commenting on the offer, Sulzer chairman and chief executive officer, Ueli Roost, said that it was not attractive to shareholders.
"In actual fact, InCentive Capital merely intend to continue the corporate realignment worked out by us to their own benefit. The InCentive Capital offer is significantly lower than the value our shareholders can expect from us," he said.
In a reaction to the Sulzer rejection, an InCentive Capital spokesman said the company was not surprised by it. He added that InCentive Capital had always stressed that it wanted to be seen as a catalyst for change.
An analyst at the Zurich cantonal bank, Carla Barella, told swissinfo on Monday that she believed the offer was made from "a disappointed shareholder" who wanted to give a kind of wake-up call the to the management.
Currently, InCentive is Sulzer's largest shareholder with 15 per cent of its stock.
swissinfo with agencies