At the annual general meeting of Sika to be held on 11 April 2017, the Ethos Foundation recommends to support the reelection of the 6 board members not tied to the Burkard family. Those directors have demonstrated for more than two years their commitment in maintaining Sika’s independence against the hostile takeover by Saint-Gobain. Ethos however recommends not to grant the discharge and not reelect the three board members representing the Burkard family (Urs Burkard, Willi Leimer, Jürgen Tinggren). In addition, Ethos recommends to not newly elect Dr. Jacques Bischoff, a representative of SWH, whose candidacy to the board was submitted by the Burkard family after the deadline for inclusion in the AGM agenda.
Sika AGM analysis and voting recommendations
The Ethos Foundation maintains its trust in the six members of the board not tied to the Burkard family, as well as the executive management of Sika, who have demonstrated their loyalty and commitment in preserving the independence of the company. This is in line with the interests of shareholders owning 83% of the share capital that are not linked to the family, as well as those of the employees and other stakeholders.
Ethos urges all shareholders to exercise their voting rights at this general meeting. It is crucial that the shareholders not tied to the Burkard Family express themselves in great number in the defense of the long term interests of Sika.
The shareholders not tied to the Burkard Family own bearer shares. In order to be able to exercise their voting rights, they must ask their depositary bank to send them an entry card. This card then allows them to personally take part in the annual general meeting or to be represented by a third party. Ethos Foundation will participate in this general meeting and will gladly represent the shareholders that wish to be represented. To this effect, they must date and sign the entry card received and send it immediately to “Ethos Foundation, P.O. Box, 1211 Geneva 1”. Ethos will vote according to the recommendations featured in its analysis.
Historical background
The announcement made on 8 December 2014 by the Burkard family (which holds 17% of the capital and 53% of the voting rights of Sika) of their decision to sell their shares to the competitor Saint-Gobain with an 80% premium was greeted by many hostile reactions. In particular, Ethos is strongly opposed to this transaction, which is contrary to the interests of Sika and its shareholders not linked to the Burkard family.
After this announcement, Ethos reacted immediately: Together with 11 major Swiss institutional investors Ethos filed a resolution to the agenda of the company's annual general meeting of 14 April 2015 requesting the removal of the opting out clause. While this resolution received support from 97% of the shareholders not tied to the Burkard family, it was nonetheless rejected, as it was opposed by the family who hold the majority of votes.
At the general meetings which followed in 2015 and 2016, the board decided to make use of Article 4 of the articles of association with the aim of preserving the interests of the company. This means that the voting rights of the Burkard Family were limited to 5% of the registered shares for decisions tied to the sale of its shares to the competitor Saint-Gobain. As a result, the family cannot take control of the board. This restriction blocks the transaction as Saint-Gobain had made control over Sika a condition for the completion of the transaction.
The Burkard family filed a lawsuit with the Cantonal Court of Zug against the decision of the board to limit the voting rights of its registered shares to 5%. In December 2015, Ethos was accepted as an accessory party to support Sika’s board in its litigation against the Burkard family. On 28 October 2016, the Court dismissed the Burkard family’s claims. The family has appealed against this ruling to the Superior Court of Zug. Ethos has decided to maintain its status of accessory party in this new legal proceeding.
For more details, please refer to our special website section on Sika.
