Earlier this month, it looked as if German generic drugmaker Stada was ready to play nice with its activist investor with an agreement to let it replace three board members. But now, it wants to make any replacements itself.
Sunday, the company said it would put forth its own independent directors to join its supervisory slate, rather than adopting the list its rebel shareholder--Active Ownership Capital--has suggested. A committee of Stada’s current board now plans to nominate at least three candidates, and the drugmaker is postponing its annual shareholder meeting to August 26 from June 9 to give it time to do so.
"The supervisory board's nomination committee will place particular emphasis on the potential candidates' relevant expertise and experience in the fields of generic pharmaceuticals and OTC (over-the-counter) products, their expertise in finance, audit and legal matters as well as on their personal independence,” the company said in a statement.
Stada appeared to have struck a compromise with Active Ownership in mid-May, when the shareholder--which wants to see more healthcare expertise at the top--agreed to replace three instead of 5 of Stada’s 9 board members. As Stada Chairman Martin Abend said in a statement, the two parties had a “constructive dialogue about the qualified candidates” prior to coming to terms.
Now, though, Stada seems to want to take things into its own hands, with a spokesman telling Reuters the Active Ownership proposal is “formally off the table.”
Active Ownership has different ideas, and it plans to plow ahead with that proposal. "We expect that the supervisory board will be newly elected in its entirety at the next AGM, as is usual in Germany. In this context, we look forward to further dialogue with the company," it said in a statement seen by the news service.
Meanwhile, Stada’s shares have jumped this month on speculation that the company could sell itself or some of its parts. With the shareholder meeting pushed back, though, “it becomes obvious that management changes at Stada or strategy changes, including a potential sale of parts of its business like generics, will take time,” Warburg Research analyst Ulrich Huwald wrote in a client note seen by Bloomberg.
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