The struggle for control of the Grupo Empresarial Antioqueño (GEA) between representatives of the holding Sura, Nutresa and Argos and those who are aligned with the interests of the Gilinski family was evidenced during the extraordinary meeting of shareholders of Sura, held on Thursday.
A high point of the session was the intervention of Sergio Londoño, who claimed to represent the shareholder Juan Pablo Amaya, defending the statutory reform proposed by the Gilinskis, who wanted the assembly and not the board of directors of Sura to decide on the Public Acquisition Offer (OPA) that is being carried out on the stock exchange for Grupo Argos shares.
Londoño referred to the passivity rule that obliges the management of a company subject to a takeover bid to refrain from carrying out any act that is not part of the ordinary course of business or that has the purpose or effect of disturbing the offer.
Although the bylaw reform was defeated, Londoño warned Sura’s shareholders, including the Argos and Nutresa groups, that their vote might have violated the passivity rule, “which would imply very serious violations of the stock market regime.”
Likewise, he stated that the success or failure of a takeover bid depends on the permanence in the position of the directors of a company, thereby suggesting that the presidents of the GEA companies would be acting for “a worrying interest of entrenchment”, and not acting in benefit of the partners of these companies.
Londoño also stated that the GEA companies are immersed in a situation of subordination, so that their votes in Thursday’s assembly denying the approval of the statutory reform might violate some rules of the Commercial Code.
Claudia Barrero, a lawyer for Grupo Argos, immediately refuted Londoño’s arguments, pointing out that he wanted to cause confusion in the audience and among minority shareholders.
“According to him (Londoño) the GEA companies might not vote, so who might do so and make a decision regarding the sale of Argos shares? According to Mr. Londoño’s argument, the only one who might vote in the assembly was him, to be left with the possibility of buying the species and handing them over to whom?”, He commented.
Additionally, in response to the observations made to the passivity rule, Barrero noted that it is not designed to favor abuse by bidders. “It is done to maintain the value of the companies, what is being done does not harm the OPA, and neither Grupo Argos nor its subsidiaries are acting outside the law.”
another pulse
In turn, José Miguel Mendoza, who claimed to represent shareholder Nicolás Polanía, also defended the statutory reform explaining that the shareholders’ meeting is the highest body of the company, that is, the primary constituent, and it is the entity that can make all the decisions that concern the company.
He added that “Colombian law gives the assembly the power to approve important matters such as a merger or spin-off. If it were true that the assembly cannot deal with issues such as the approval of the takeover bid, it might not deal with larger issues either.
Mendoza specified that even Sura’s own statutes in its article 23 grant the assembly the power to approve the segregation, which is nothing more than a sale of significant assets. “What was proposed in the reform was a natural development of what the statutes already say.”
This intervention was met by Juan Carlos Rocha, lawyer for the Argos Foundation, who insisted that Mendoza’s strategy was to cause confusion.
From Rocha’s point of view, the board of directors is the one that has by statute the power to decide on the investments or divestments in which the company must incur or participate. He argued that this is not a competence of the assembly and that those who promoted the statutory reform sought to turn the assembly into another administrator of Sura.
“They wanted to delay the members of the board, who were elected on Wednesday, so that the assembly would be responsible for managing the business of the society. Were they going to pay them (the assembly members) to be members of the board? For that there are professionals, exclusively, dedicated to this management”, asserted Rocha (see For Against).
In the same scenario, the lawyer and small shareholder of Sura, Fernando Rodas, questioned the handling that the promoter of the OPAs has given to them. “It is as if he were trying to lynch and kill the names of the boards of directors and the administrators of these companies.”
Other business consultants were of the opinion that those who are in a position of evident conflict of interest are the new shareholders, as they are the ones directly interested in and benefited from an eventual sale of Grupo Argos shares, even knowing that the offer they made is unattractive.
A fact that might confirm this thesis is that last Friday Gabriel Gilinski, who was elected as patrimonial member of the board in the ordinary meeting of Nutresa on March 22, presented his resignation from the position; that is, he retired just three months following his election.
next meetings
The tone of the discussions of the previous Thursday marks what might be the extraordinary shareholders’ meetings scheduled for June 29 and July 1.
This is how Sura scheduled the meeting for Wednesday at 7 in the morning, in the Suramericana theater, with the aim of evaluating and deciding on potential conflicts of interest of some members of its board, in the context of the takeover bid launched by shares of Grupo Argos.
For its part, Nutresa called an extraordinary meeting for next Friday, at 10 in the morning, with the same order of the day, that is, to deal with the potential conflicts of interest of the board to decide on the OPA.
Sura, with 35.32% of the shares of Grupo Argos, is the main shareholder of that holding of infrastructure, followed by Nutresa, which owns 12.41% of the species
Meanwhile, the Colombian Stock Exchange (BVC) reported that during the first four days of the OPA it received 54 acceptances from those interested in selling to the Gilinskis. These represent 44,664 shares, 0.007% of Grupo Argos’ shares in circulation.
Nugil, the Gilinski company that owns the offer, expects to buy at least 26% of the shares and a maximum of 32.5% participation, paying US$4.28 per share. The offer acceptance period will be open until July 6, but might be extended.
The takeover bid was announced on May 19 and while the terms of the deal were known, the transactions with the share, which was worth $13,540, were suspended on the stock market. Since last June 13, when operations with the species were resumed, its value has increased by 18.38%, reaching values of $16,030. For Davivienda Corredores, the target price of this security is $15,000.
The role of funds
Among the pension funds with shares in Grupo Argos are Porvenir with a portion that can reach 5.23%, Protección with 4.63%, Colfondos with 2% and Skandia with 0.52%, that is to say that together they might have a stake that exceeds 12.38%.
With the current price of the OPA, US$4.28, these share packages would be worth regarding US$351.47 million, which at the Representative Market Rate of the dollar this weekend of $4,129.87 is equivalent to $1.45 billion.
However, there are those who warn following analyzing Gilinski’s behavior in the other OPAs, that by raising the prices offered for the shares, it would be possible for the funds to stop receiving millionaire resources if they sell in this first round by Grupo Argos.
They recalled that in the case of the takeover bids for Sura, the value of the offer was adjusted by 23%, and if it does the same for Argos, the takeover bid would rise to US$5.26 per share. With which the portion of the funds would add US$431.95 million or $1.78 billion.
For the offers for Nutresa Gilinski increased the price by 63%, which means that if this were to happen this time, the offer for Argos would be US$6.97, with which the percentage of the funds might be worth US$572.37 million or $2 .36 billion.
“It is understood that the value that the funds might lose when selling in this OPA might be between $330,000 million and $910,000 million,” they concluded.
