The battle for control of Holvis, the Swiss paper group, intensified yesterday when BBA, the UK engineering group, bought 11.1 per cent of the company.
BBA said the move was aimed at bolstering its recommended Sfr466m (pounds 247m) bid for Holvis against a Sfr487m (pounds 257m) hostile offer from International Paper of the US. "It signifies that BBA is serious about Holvis," a spokesman said.
Holvis's chief financial officer, Rudold Wenger, said the 11.1 per cent stake represented the entire holding of one investor, whom he declined to identify.
IP said the UK company's payment of Sfr500 a share for 98,350 Holvis shares was of no significance and it would press on with its bid.
Holvis has already rejected IP's increased offer, saying it would stand by its agreed offer from BBA. However, Milan Turk, IP's senior vice president, said: "We don't believe in pursuing things with no possibilities of success. Our time is too valuable. We are confident in our position and, being confident, we are proceeding."
BBA, whose chairman is Bob Quarta, made a last-minute pounds 247m bid for Holvis on Friday, with a pounds 132m side-deal for Fiberweb, the Swiss company's non- woven division. Holvis and BBA signed a lock-out deal preventing another bidder from taking over Fiberweb whatever the size of its bid for the entire company.
IP raised its bid for Holvis on Monday from Sfr435 to Sfr500 a share provided Holvis abandoned an agreement to sell Fiberweb to BBA. But Holvis said it would honour BBA's bid and added it would not pull out of the separate deal to sell Fiberweb.
Executives from Holvis, IP and BBA will attend a special meeting at the bourse commission, which oversees Switzerland's takeover code, on Wednesday to discuss the takeover battle.
Mr Turk said IP considered Holvis had not acted in good faith. IP sought discussions with Holvis last week and was finally told on Thursday that it had 15 minutes to improve on its Sfr435 per share offer. IP promptly upped its bid to Sfr480.
Turk said IP was then told there was another bidder but was given no immediate details. It later emerged that BBA had bid Sfr500 a share, only 4 per cent more than IP's offer, Mr Turk said. A Holvis executive again said yesterday that it remained committed to the BBA deal.
Lock-out deals, such as the BBA-Holvis agreement, are illegal in the UK in contested takeovers. Under Swiss law it is currently possible for the board of directors to sell assets without shareholder approval. However, new rules banning such lock-out deals are to come into force next year.
This is Switzerland's first hostile takeover battle.