Sulzer chairman resigns as InCentive Capital circles

Chairman Ueli Roost hopes that his resignation will deliver a knock-out blow to InCentive Capital’s hostile takeover bid.

Ueli Roost, the chairman of Swiss engineering group Sulzer, has resigned from the group in an attempt to strengthen its chances of defeating a hostile takeover bid from InCentive Capital, the investment company headed by Swiss financier Rene Braginsky.

Speaking about his decision, Roost said: “I am being identified very strongly with the failed merger last autumn of Sulzer and Sulzer Medica due to shareholder resistance. For Sulzer therefore I represent an additional point of attack in the current takeover attempt.”

Leonardo Vannotti, who has been a director at the group for several years, has been appointed chairman of the Sulzer Ltd board of directors with immediate effect and Max Link, currently vice-chairman of the Sulzer Medica Ltd board has been named as chairman of the publicly listed medical technology company.

Swiss-based investment firm InCentive Capital announced its plans to takeover Sulzer last month in a deal thought to be worth $2.64bn. Incentive is Sulzer’s largest shareholder with a combined direct and indirect 15 per cent stake. Roost said at the time: “This offer is not attractive for our shareholders. In actual fact, InCentive Capital merely intend to continue the corporate realignment worked out by us to their own benefit. The InCentive Capital offer is significantly lower than the value our shareholders expect from us.”

Sulzer, weakened by a share price drop that was itself caused by investors' rejection of the proposed merger of Sulzer and Sulzer Medica, declared that it would continue to expand its industrial sector businesses and would go ahead with plans to wholly separate Sulzer and Sulzer Medica. Roost had already announced plans to retire as Sulzer’s chairman but had planned to stay on as chairman of the separately listed Sulzer Medica, the medical technology company. Sulzer holds a 74 per cent stake in Medica but as part of its takeover defence is planning to spin off the medical company.

Last month, Sulzer’s board advised shareholders to rejected InCentive’s takeover bid, saying that the realignment of Sulzer Corporation is already underway and will create greater value for shareholders, employees and customers.

Newly appointed Vanotti said: “With the Sulzer Medica spin-off planned for this year, we shall be well on course for a successful future. Both companies have well-founded strategies promising significant value creation. In the interests of our shareholders, we must therefore ensure at the coming Annual General Meeting that InCentive Capital AG does not take control of Sulzer.“

Sulzer rejected the pre-announced bid on 23 February, arguing that the bid was too low and that InCentive lacked a clear strategy for the company.