BBA confident of Swiss go-ahead
Thursday 01 June 1995
BBA Group said yesterday it was confident of winning approval for Switzerland's first hostile takeover - the Sfr466m (pounds 247m) bid for Holvis, a Swiss textile maker and paper distribution company.
BBA revealed that, before launching the bid, it had sought clearance from the Swiss bourse commission, the body responsible for approving acquisitions of Swiss companies by foreign interests. This prior submission included the offer to buy Holvis's Fiberweb subsidiary should the full deal fail to go through.
The commission's inquiry follows a challenge from the rival bidder, International Paper of the US, over the Fiberweb deal, and the outcome is expected on Monday.
BBA's chairman, Vanni Treves, said: "What the commission said is confidential, but we would not do anything that is not consistent with the commission's wishes." He said he was confident the commission would find in the company's favour.
BBA has offered Sfr500 per Holvis share. If its bid fails, it will buy Fiberweb, for Sfr250m.
International Paper, the world's largest paper company, has increased its offer to Sfr550 per share provided Holvis abandons the agreement to sell Fiberweb to BBA.
Critics say the Fiberweb deal would not be allowed under British or US law, as such deals can prevent shareholders getting maximum value. Mr Treves acknowledged that the deal would not have been possible in Britain, but claimed Holvis's shareholders would benefit.
Roberto Quarta, chief executive, said BBA would not have made the bid if it had not secured the agreement to buy Fiberweb. "I did not want to become a stalking horse, with Holvis using our bid to get a higher offer," he said.
On Tuesday, BBA secured 11.1 per cent of the company when it bought a stake held by a private Danish investor for Sfr500 a share.
The Holvis board restated its support for the BBA bid. International Paper already owns 25 per cent of Holvis - which it acquired for Sfr435 a share - and wants an extraordinary general meeting of Holvis shareholders to discuss the bid.
The commission's rulings do not have the force of law in Switzerland, and it remains unclear whether BBA would accept a decision against it. The company said simply that should the deal not be approved it would then consider its next move.
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