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Monday, 14 May, 2001, 12:57 GMT 13:57 UK
Financier rocks family firms
Novartis chairman and CEO Daniel Vasella
Novartis chief Vasella is expected to push for more control at Roche
By BBC News Online's Jorn Madslien

The Swiss billionaire financier Martin Ebner has upset some of Europe's wealthiest families with the recent repositioning of his investments.

Marcus Wallenberg, chief executive, Investor
Investor chief executive Marcus Wallenberg's family is under pressure
The family-controlled Swiss pharmaceutical group Roche called a board meeting on Monday to discuss its options for the future after its competitor Novartis last week bought 20% of the voting shares in the company from Mr Ebner's BZ Group.

While on Friday, the "Royal Family of Swedish Business", the Wallenberg family, faced a call from Mr Ebner to split their holding company Investor into two after he bought more shares in the company to boost his voting rights to 10.2%.

The elusive billionaire declined to be interviewed by BBC News Online about the deals.

New target

Roche has in recent months successfully fended off Mr Ebner's attempts to wrestle control away from the group's founding Hoffmann and Oeri-Hoffmann families.

So last week, Mr Ebner gave up and sold his Roche stake to its arch rival, drugs giant Novartis, for 4.83bn Swiss francs ($2.79bn, 1.95bn).

He has now turned his attention to Investor.

The Wallenberg empire is governed firmly by the family's holding company which holds controlling equity stakes in a wide range of leading Swedish multinational companies.

These include the health care group Gambro, the mobile phone firm Ericsson, the engineering company ABB and the drugs firm AstraZeneca.

Swedish strength

Investor has said that it does not object to Mr Ebner's engagement, even though he has called for the holding company to be split in two in an attempt to boost its value.

"Everyone who is interested in our shares is welcome to buy them," said head of information Nils Ingvar Lundin, adding that the company would "never comment on individual shareholders' objectives".

Investor, which is a listed company, has been trading at a discount for years - that is, its share price is lower than the market value of its assets.

This is because many investors are loath to buy into the family-controlled company, essentially because most of the shares available carry less voting rights than the preferential shares held by the family.

As a consequence, even owners of large stakes in Investor may have very little actual influence.

Ebner's efforts

In contrast, Mr Ebner, through BZ's investment vehicle Spezialitaeten Vision, now controls more than 10% of the Investor votes, even though he owns just 7.7% of the shares.

This is because he has managed to buy preferential shares.

Roche's ownership structure is similar. Here the founding families control more than half the votes even though they only own 10% of the shares.

In their clashes with Mr Ebner, this was sufficient to keep him at bay.

The billionaire was rejected by Roche's board when he sought to get his feet under the table there.

And it is unlikely that Investor will offer him a much warmer welcome if he tries to gain a seat on its board.

Swiss power

But although Mr Ebner has turned his attention to Sweden, it is unlikely that the Hoffmann and Oeri-Hoffmann families' battle for control is over.

At Monday's meeting, the loss-making firm was expected to discuss ways to cut costs in its pharmaceutical division, with several thousand job cuts expected both in Europe and in the US.

And although the group has denied that a merger with the larger Novartis will be on the agenda, there is no doubt that the Roche management will discuss how to fend off attempts by Novartis to gain more influence.

A meeting has been arranged between Roche's chairman Franz Humer and Novartis' chairman Daniel Vasella.

And nobody expects Mr Vasella and Novartis to settle for a position as a sleeping partner in the group.

But Roche officials have said that the founding families have no intention of ceding their majority voting stake.

See also:

07 May 01 | Business
28 Oct 00 | Europe
26 Feb 01 | Business
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