Family office versus family business

As any seasoned observer of the family business sector knows, despite all the virtues of the sector, sometimes it doesn’t show itself in the best light. And so it is with a particularly insidious fight between the family shareholders of a Swiss chemicals and adhesives group called Sika, and non-family shareholders, including the family office of Bill and Melinda Gates.

Family Capital reported on the tussle back in July, but the story has entered a new chapter with a decision by a Swiss court that effectively backs the family shareholders’ rights to sell their shares to the French conglomerate Saint-Gobain. The federal administration court rejected an appeal by the Gates Foundation Trust and Cascade Investment, the family office of Bill and Melinda Gates, to block the so-called “opting-out” clause, which allows the family to sell their shares without making an offer to public shareholders.

Sika’s founding Burkard family last year agreed to sell a 16% stake with 52% of the voting rights to Saint-Gobain; the stake is said to be worth around $3 billion.

In a statement, Urs Burkard, representing the family, said: “This decision is further proof that Sika’s positions are untenable under Swiss law. We are very confident that the ill-founded restriction of the voting rights applied by Sika’s board of directors at the last two general assemblies will also be declared illegal.”

Despite the court’s ruling and the family’s commitment to push on with the sale, the Gates’ family office and foundation have said, according to an email statement quoted by Bloomberg, that they oppose the “ill-advised planned transaction that was structured to serve only the interests of Schenker-Winkler Holding AG (the Burkard family) and Saint-Gobain.” The statement added that Cascade and the foundation will oppose the transaction “until reasonableness prevails, even if that requires a multi-year battle.”

So, round one to the Burkard family, but round two and the final outcome of the fight is far from certain given the Gates’ determination not to back down.