03.05.04
A group of minority shareholders in German hair-care product maker Wella has sued Wella over a licensing agreement with its new owner, Procter & Gamble, to sell Wella products worldwide. The minority shareholders, led by Close Brothers Corporate Finance Ltd., said were asking a regional court in Darmstadt, near Frankfurt, to declare the licensing agreement between Wella and P&G unlawful.
"The Global License Agreement between Wella and P&G isin the absence of a domination agreementunlawful under the German Stock Corporation Act," Stephen Auslebrock of Close Brothers said in a statement.
P&G acquired Wella in a 5.6 billion euro ($6.8 billion) deal last year. Shareholders representing around 20 percent of the capital did not accept P&G's offer and have been trying to reach a sweetener in the courts. A spokesman for P&G dismissed the rebel shareholders' petition as being without merit.
"This is nothing but a further attempt by the hedge funds to misuse shareholders' rights to squeeze money out of the company," the spokesman said.
The minority shareholder group has already filed a petition asking the Darmstadt court to order a special audit into the relationship between Wella and P&G.
The shareholders claim P&G is treating a firm in which it owns an 80 percent stake as a wholly owned subsidiary, and say the Cincinnati, Ohio-based company has a record of neglecting newly acquired products to make space for its existing brands.
They point to hairstylist Vidal Sassoon, who last year sued P&G for hundreds of millions of dollars, claiming the brand's "systemic destruction" after P&G bought it in 1985. ($1=.8209 Euro)
"The Global License Agreement between Wella and P&G isin the absence of a domination agreementunlawful under the German Stock Corporation Act," Stephen Auslebrock of Close Brothers said in a statement.
P&G acquired Wella in a 5.6 billion euro ($6.8 billion) deal last year. Shareholders representing around 20 percent of the capital did not accept P&G's offer and have been trying to reach a sweetener in the courts. A spokesman for P&G dismissed the rebel shareholders' petition as being without merit.
"This is nothing but a further attempt by the hedge funds to misuse shareholders' rights to squeeze money out of the company," the spokesman said.
The minority shareholder group has already filed a petition asking the Darmstadt court to order a special audit into the relationship between Wella and P&G.
The shareholders claim P&G is treating a firm in which it owns an 80 percent stake as a wholly owned subsidiary, and say the Cincinnati, Ohio-based company has a record of neglecting newly acquired products to make space for its existing brands.
They point to hairstylist Vidal Sassoon, who last year sued P&G for hundreds of millions of dollars, claiming the brand's "systemic destruction" after P&G bought it in 1985. ($1=.8209 Euro)