| BAAR, Switzerland, April 11
BAAR, Switzerland, April 11 Sika
shareholders attacked the Swiss chemical company's founding
family for pushing through a proposal for a smaller dividend
increase -- the latest twist in a bitter takeover battle with
The Burkard family's call for a dividend of 96 Swiss francs
per bearer share, rather than the board's proposed 102 franc per
share payout, won approval at the company's annual meeting on
Tuesday thanks to the family's voting majority.
Sika Chairman Paul Haelg said the family's proposal was
"highly unusual" and was in the interest only of the heirs, who
want to sell their controlling stake to Saint-Gobain for 2.75
billion Swiss francs ($2.73 bln). Sika's management opposes
Saint-Gobain's takeover bid.
"The fact is that under the contract between the parties
Saint-Gobain is entitled to the dividend which will be deducted
from the family's sale price," Haelg said, referring to the
agreement the family has signed with Saint-Gobain over the stake
"We regret that (the family) is proposing a lower dividend,
all the more so because the difference between its proposal and
ours is a mere 15 million francs, which is insignificant in
comparison with our net cash of over 400 million francs."
The family says the dividend will only be deducted from the
sale price if the money is removed from their investment vehicle
which Saint-Gobain wants to buy to get control of Sika.
Other shareholders also criticised the family's stance.
"The dividend payout ratio suggested by the board is 46
percent, which is a sustainable figure," said Dominique
Biedermann, chairman of shareholder advisory firm Ethos, which
represents shareholders holding 8 percent of the stock.
"This counterproposal is stupid and I don't understand why
the family are doing this. It will only anger the other
Urs Burkard, a family member and Sika director, said
increasing the dividend from last year's 78 francs was "too
"The dividend should be increased in proportion to income,
the increase in recent years has been out of proportion,"
Burkard said. "It is better to keep the money in the business."
The Burkards have battled Sika's board over their plans to
sell their investment vehicle Schenker-Winkler Holding (SWH) to
Saint-Gobain, which emerged in December 2014.
SWH controls Sika because its 16 percent equity stake comes
with nearly 53 percent of the voting rights.
Sika's board has responded by limiting SWH's voting rights
to 5 percent on matters relating to the hostile takeover, but
not on issues like the dividend.
Sika's board maintained the limit on SWH's voting on board
members, keeping off the family's nomination of Jacques Bischoff
as a director. Haelg was also re-elected chairman.
Earlier on Tuesday, Sika forecast sales would exceed 6
billion Swiss francs this year after they rose by 9 percent in
the first three months of the year.
"It is clear beyond doubt that Sika does not need
Saint-Gobain in order to achieve its strategic targets for
2020," Haelg said at the AGM.
($1 = 1.0071 Swiss francs)
(Reporting by John Revill; Editing by Susan Fenton)