Eglisau, Switzerland, February 22--Forbo shareholder Michael Pieper has demanded that the Forbo board immediately terminate the bidding process for the company.
It was also announced that the company’s CEO This E. Schneider has handed in his resignation.
However, Dow Jones reported that Chief Executive This Schneider didn't choose to leave Forbo but that he was dismissed Tuesday morning by Forbo's board of directors.
Schneider also dismissed allegations that he was in close contact with Forbo's major shareholder, Michael Pieper, and that he acted together with Pieper to push for the halting of the current bidding process for Forbo.
Pieper earlier Tuesday said that he opposed the current bidding process surrounding Forbo. He also said that he regrets Schneider's departure.
The company’s board said it adheres to its previous statement to support the bidding process until 25 February 2005, but considers the probability of an offer being made to be questionable in view of the recent share purchases by Pieper and his opposition to the bidding process.
Pieper had been a member of Forbo's board since 2000. Together with the delegate of the board, This E. Schneider was part of the committee that co-initiated the bidding process for the company.
This process was triggered by an offer not solicited by the board. After the first bidder had increased his initial price indication, the Board of Directors has admitted – with the approval of and in cooperation with Michael Pieper and This E. Schneider – the interested bidders to conduct a Due Diligence about the company. Following a corresponding announcement (and a resulting increase in stock price) the capital increase was successfully approved by the General Assembly.
On December 6, 2004, four days after the extraordinary General Assembly deciding to increase the share capital, Michael Pieper surprisingly declared his resignation from the board with immediate effect on the grounds that he intended to further increase his shareholdings in the company of, at the time, almost five per-cent.
On January 21, Pieper announced that his stake, together with the one of Franke Group controlled by him, had passed the threshold of 20 percent.
On February 20, Pieper informed the board that he held clearly more than 25 percent of Forbo's share capital.
In the past weeks, the Committee of the board has pushed the bidding process ahead. The process is now about to be closed; one of the remaining three bidders intended to submit an offer with a price of CHF 260 per share on Friday of this week at the latest.
The corresponding documents have been drafted and are being pre-examined by the authorities, a transaction agreement is ready to be signed, and it has been ensured that at this price, a fairness opinion would be obtained. There were indications from two other bidders that suggest that competing offers could have followed.
On February 17, the board was, to its surprise, confronted with the resignation of This E. Schneider who motivated this step essentially by arguing that in his view the bidding process should be broken off instantly. Simultaneously, the board received a list of claims from Pieper who declared that he, together with the Franke Group, now held clearly over 25% of the shares of Forbo. Pieper demands, inter alia, the instant registration of his shares in the shareholders' register and the break-off of the bidding process.
"I am surprised that Mr. Pieper and Mr. Schneider suddenly want to declare the bidding process, which they have both actively supported about two months ago, as obsolete," said Rolf Watter, designated chairman of the board. "I regret the abrupt departure of our CEO in this important and critical phase for our company."
The position of the new major shareholder in fact makes the probability of takeover offers questionable. Indeed, the board would have welcomed to give the shareholders the opportunity to decide themselves about a potential takeover of the company, but must recognise that the position taken by Pieper and the apparently concerted resignation of CEO This E. Schneider constitutes a very high obstacle.
The board will now ensure that the management and all employees concentrate on the normal business to the advantage of all of Forbo's clients.
