Germany’s Stada is accommodating requests from an activist investor to rejig its board of directors, agreeing to play nice instead of staging a pricey defense.
Active Ownership Capital has agreed to replace three instead of five of Stada’s nine supervisory board members at the company’s annual general meeting next month. Active Ownership initially wanted more of a board overhaul. The investor and drugmaker already had a “constructive dialogue about the qualified candidates,” Stada Chairman Martin Abend said in a statement. Abend will remain on the board as a result of the talks.
Stada agreed to the compromise to escape a costly legal battle and the need for an extraordinary meeting of shareholders, the company said, both of which would take a toll. The board “sees its obligations first and foremost in the well-being of the company,” Stada said in a statement. “For this reason, it would like to ensure a quick decision in this matter.”
Luxembourg-based Active Ownership, which holds a 5% stake in Stada, has said that it wants to switch up the company’s advisory board to add individuals with international healthcare expertise.
But shares in Stada have jumped 11% this month on speculation that Active Ownership’s efforts could eventually lead to a sale or breakup of the company, Reuters reports.
It wouldn’t be the first time Stada has explored a sale. Back in 2014, the company said it might have to sell itself after failing in a series of buyout attempts. Analysts floated Mylan’s ($MYL) name around as a potential buyer.
But Stada has enjoyed some success on the M&A front. In 2013, the company struck a €259 million ($293 million) deal for British OTC company Thorton & Ross. The buy was meant to give Stada a better position in the U.K. OTC market, as it could run its own brands through Thorton & Ross’s marketing and distribution channels.
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