Eglisau, Switzerland, February 23--The purchase of a 25% stake in Swiss flooring group Forbo by a former executive appears to be part of a mutiny that will likely scuttle takeover talks sparked by private equity interest, according to The Deal.com.
The website noted that Forbo said in a statement issued this week that Michael Pieper, who resigned from the group in December, had amassed a stake of more than 25% and would seek shareholder approval for effective control of the company as well as the right to appoint a slate of new executives.
The Deal.com said that the move comes after Pieper and the board initiated takeover talks with CVC Capital Partners last year that eventually lured other bidders and boosted the group's share price. However, Pieper withdrew his support recently, and CEO This Schneider left the company Tuesday over a disagreement with the board related to the talks.
Forbo, according the The Deal, said it would continue with takeover negotiations. Formal bids are due Friday, and the Swiss group expects at least one bidder to offer Sfr 260 ($223.86) per share, an 8.3% premium to Tuesday's close. The shares climbed as high as Sfr 320 in December after news of CVC's interest leaked out.
"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," the company said.
Last year it hired Credit Suisse First Boston to prepare a fair-value opinion on any approach.
Shareholders will likely have the ultimate decision in the spat when they vote April 29 whether to lift a regulation that prevents any single shareholder from voting more than 8% of the company's shares. Should the law be removed, Pieper, who also owns Swiss bath and kitchen equipment maker Franke AG, would gain effective control of the company.
Should that happen, Forbo said Pieper would appoint a new executive panel to deal with its ongoing woes. Sales remained relatively level last year, gaining just 1.5% to Sfr 1.62 billion, and the continual loss of CEOs has made a much needed restructuring difficult. Schneider was the third chief to leave over the last two years.
