Wella Holding Group Opposing P&G’s Bid Grows

A group of investors that has mobilized to pressure Procter & Gamble Co. into further sweetening its takeover bid for Wella AG has just gotten larger, according to its coordinator. “The group we’re working with now represents 35% of the preference share capital,” Stephen Aulsebrook, co-chairman of Close Brothers Corporate Finance Ltd., told Dow Jones Newswires Friday.

Up until Friday’s announcement, the group led by the UK-based investment bank encompassed only 30% of Wella’s preferred shareholders. And opposition to the takeover deal doesn’t end there. German consumer goods company Henkel AG , which controls 10.4% of Wella’s preferred stock capital, has also stated publicly that it views P&G’s offer for the non-voting shares as too low.

With Henkel’s stake, that makes more than 45% of preferred stock capital that Mr. Aulsebrook says he believes won’t be tendered to the U.S. consumer chemicals company by the initial May 28th deadline.

Procter & Gamble gained majority control of the German hair care specialist in March after buying 77.6% of the company’s voting rights held by the Stroeher family for EUR92.25 per common share. Under the new German takeover law, the U.S. consumer chemicals company then had to make an offer to the remaining Wella investors to tender their shares for the same price.

But since the law doesn’t stipulate that non-voting preference shares be valued at the same amount, P&G initially only offered those investors the legal minimum of EUR61.50 per share. P&G then revised its offer in April to EUR65 following heavy criticism from preferred shareholders who felt the offer was substantially lower than the fair value of the stock.