Victory not interested in easy killing
Austrian private equity group Victory has finally won over the sceptical Swiss after taking over OC Oerlikon and Saurer, co-owner Georg Stumpf told swissinfo.
Victory generated waves of negative press during the protracted and emotional buyout in 2005 of technology company Oerlikon, then named Unaxis, followed by car parts maker Saurer last year.
The acquisitions have prompted calls to reform company takeover laws in Switzerland which would force buyers to disclose their identity earlier than they are obliged at present.
However, Stumpf believes the tide is turning after Oerlikon announced its best set of annual results in six years on Tuesday.
Stumpf, who also holds the post of Oerlikon chairman, said Victory will team up with Russian billionaire Viktor Vekselberg’s Renova group to make further acquisitions, but declined to give any further details.
swissinfo: Were you surprised by the reaction to your entry into Switzerland?
Georg Stumpf: When we first came to Switzerland at the beginning of 2005 there was a lot of scepticism and critics saying they did not know what we were doing here.
But I think that was totally understandable because Oerlikon [then Unaxis] was such a highly important strategic asset at that time. If another group takes control of such a famous [Swiss] company and transforms it, it will shake the earth here.
First the comments were very critical, then they turned to neutral. Now people can see that we are doing what we promised and we haven’t just grabbed the cash out the company and gone away. It has been acknowledged that we are clearly developing and bringing the company forward. We are here to stay.
swissinfo: Could your activities be hurt by the proposed changes to takeover rules in Switzerland, forcing earlier disclosure when shares are bought?
G.S.: Our activities are not planned according to the disclosure rules. They are a formality that we have to fulfil, but our activities are clearly focussed on a strategic basis.
We conduct transactions around the world and where there are different disclosure rules, but they are all within the same bandwidth. If Switzerland adopts the disclosure rules that the latest information points to then it will be very comparable to what is happening in England. This would be nothing special.
swissinfo: What is your relationship with Viktor Vekselberg and Renova? Are you in partnership?
G.S.: When we first entered the company [Unaxis/Oerlikon in 2005] it was not planned because it was too early for that. The relationship with Renova was established by the beginning of 2006 and we have now reached a very stable basis.
When Mr Velkselberg, an excellent businessman who has built up a huge conglomerate himself, saw how we were doing business he clearly thought this was something very interesting strategically that he would like to be part of.
swissinfo: Will you be collaborating on future takeovers?
G.S.: We will be working in partnership in future buyouts and mergers. This is a relationship that is built on trust and success and that is an excellent basis for everything else.
swissinfo: Can Vekselberg open the doors to Russia for Oerlikon and Saurer?
G.S: Russia is a very important market and there will be a lot of things taking place there. We think that with Mr Vekselberg we cannot be better positioned and this is an excellent basis to expand into the Russian and central European markets.
swissinfo-interview: Matthew Allen in Zurich
Victory bought technology group Unaxis in June 2005 and promptly renamed it OC Oerlikon. The group is the world leader in coating solutions and textile machinery, and is number two in the area of vacuum technology.
Last September, Victory integrated machinery manufacturers Saurer into the fold and in February of 2007 raised its stake in telecommunications company Ascom to 20.1%.
Renova bought an initial 10% stake in Oerlikon in 2006, raising its stake to 14% in January 2007 with a heavy hint that it may yet more shares.
Renova boss Viktor Vekselberg said earlier this year that he is in talks with other unnamed Swiss firms.
On Tuesday Oerlikon reported a net profit of SFr302 million ($248.6 million) for 2006, its best performance in six years. Net profits in 2005 were SFr21 million.
Much of the improved performance was put down to the integration of Saurer and the subsequent restructuring of the group.
Georg Stumpf owns half of Victory through his Vienna-based company Millennium. The other half of Victory is owned by fellow Austrian investor Ronny Pecik.
The ease with which foreign private equity firms Victory and Renova have taken over Swiss household names has sparked calls for changes to company acquisition rules.
At present a buyer can remain incognito if they buy up to 4.99% of a Swiss company’s voting shares. Another 4.99% of options – contracts that allow the owner to buy shares if required – are also allowed before the buyer has to disclose their identity.
On top of that, buyers can theoretically acquire an unlimited number of cash settlement options in a Swiss firm – contracts that can be exchanged for either cash or shares.
The new proposals would force disclosure on the accumulation of 3% of shares and options combined while closing the cash settlement option loophole. These rule changes could be in force by the autumn.
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