Over the weekend bloomberg reports that Holcim Ltd.’s second-biggest shareholder, Eurocement Holding AG, plans to vote against the Swiss company’s merger with Lafarge SA, even after the cement makers last week agreed on new terms and management changes to placate investors.
We conversed with a proxy adviser that will work for both Holcim and Lafarge.
We understand that the proxy adviser has tried in the recent past to get a comment as to Eurocement’s intention to vote without success, we understand from our conversation that the potential lack of support from Eurocement is not a surprise.
Further, the proxy believes Harris acts as an activist at times and a long term value investor
Holcim expects to ask its shareholders for merger approval at a shareholders' meeting. The next meeting could be early May.
There is only ONE vote by Holcim shareholders for the capital increase. With this vote they vote for the merger. No additional votes.
Holcim need to get twothirds support from their shareholders.
In 2014 only 66,94% of the Holcim issued share capital was present /represented at the General Meeting, in 2013 only 61.2%
At similar percentages, 23pct is needed to block the merger.
Eurocement has c11pct and thus would need to find an additional 12pct support to block the merger
Meaning, Eurocement and Harris votes are not enough to block the capital increase/merger. Broad Holcim shareholder support would be needed for it to fail and consensus seems to be in favour of a merged entity