Skion-Altana 2009
The Statement of the Target´s Management
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Strong support of the management and the supervisory board,
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Conflict of interest at Altana: Susanne Klatten will not participate in the resolution of
the supervisory board,
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Valuation methods by management: valuation of Altana by PwC with IDW S1,
fairness opinion by PwC, analysts, stock development, possible synergies without any
details,
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Squeeze-out aim: Skion explicitly says that it will buy more shares in the market
and/or from other contracts. The goal of the acquirer is to squeeze-out the remaining
minority. Voluntarily Skion will let all accepting shareholders participate in a possible
future increase of the squeeze-out price (Spruchverfahren),
Fairness Opinion Letter
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Provider: PwC,
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Published: November 18th 2009 with target statement,
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Fairness of price: yes,
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Adviser in previous business relationships: not stated,
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Other conflicts: not stated,
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Valuation methods: discounted earnings method as IDW S1 (Ertragswertverfahren),
trading multiples, transaction multiples, stock price, analysts,
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Transparency: no parameters released, no results,
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Source of information: no independent auditing of the information provided by Altana
management; no independent financial, legal, operational or tax due diligence;
completeness statement of target management,
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Information: financial statements from 2006 to 2008 until mid 2009, corporate
planning, statements of analysts, dialog with management,
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Disclaimer.
Takeaways
Takeaway 1: Altana was already a subsidiary of Skion which is owned by Suanne Klatten.
Additionally Mrs. Klatten is vice president of the supervisory board of Altana. Due to possible
conflicts of interests she was not a part of the debate or resolution in the board.
Takeaway 2: Skion was showing strength by announcing that it would continue to buy shares
in the market or from contracts while running the second offer.
Takeaway 3: In 2008 and in this offer Skion and Susanne Klatten did not achieve the goal of a
95% majority. The strategy of Skion was to offer every shareholder a guarantee to participate
in a possible future price increase due to a squeeze-out process. Purpose was to make as many
shareholders as possible accept the offer which would support Skion it its airm for a squeezeout.
Takeway 4: The Fairness Opinion Letter was published and contains an extensive description
of valuation methods, but no parameters were disclosed. This Fairness Opinion is market
standard; it states the fairness of the offer but no valuation range. The main purpose of the
Fairness Opinion is a legal protection function: it demonstrates that target management made
an informed decision.
Takeaway 5: PricewaterhouseCoopers did verify the information provided by Altana
independently, but the Altana management signed a statement of completeness.
Takeaway 6: Stock price of Altana rose significantly above 14 Euro which could have several
reasons: a) Skion was buying shares in the market b) minority shareholders were not willing
to sell c) new shareholders were buying into the shares. All three aspects support the
willingness of minority shareholders to resist the aim of Skion to run a squeeze-out.
Open Questions
1. Why did Skion not reach a 95% share?
2. Was Skion's strategy made to pave the way for the squeeze-out?
3. Corporate Governance: How can we explain the conflicts of interest in the takeover?
Is Susanne Klatten’s abstinence from the supervisory board resolution an appropriate
solution for the conflict of interest?
4. Does the Fairness Opinion protect management from potential shareholder lawsuits?
5. Should PwC disclose parameters and valuation ranges?