Tuesday, April 27, 2004

P&G offers more to control Wella



By Cliff Peale
The Cincinnati Enquirer

Procter & Gamble Co. will offer more for the minority shares of German hair-care company Wella AG in an attempt to gain full control of the business.

P&G said Monday it would consent to a "domination agreement" with Wella. That means it will offer 72.86 euros - about $86.41 - per share for the 19 percent of the total Wella shares it does not now own.

Under the agreement, P&G must pay a set price to all Wella shareholders, based on Wella's share price. But it will be able to control Wella's business decisions and transfer Wella's profits into its own, P&G said in a statement.

P&G spokesman Brent Miller said "full ownership is something that will simplify the business process."

P&G bought about 99 percent of Wella's voting stock last year with its $5.7 billion acquisition. It offered holders of nonvoting "preference shares" 65 euros per share, a lower price than the controlling shares, prompting a protest from the investment funds that held those shares.

The group forced a special shareholder meeting and cited German law, which requires Wella to remain independent and treat all shareholders equally. Procter had rebuffed the group's protests until now. But it conceded the process has been a distraction, which led Wella management to ask for the domination agreement.

P&G also said Monday it would propose lowering Wella's dividend - which guarantees passage since P&G owns nearly all of the voting shares - to invest more money in the business. P&G shares closed up 23 cents Monday at $105.22.

The annual Wella shareholders meeting is June 8.

Wella minority shareholders could not be reached for comment.

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E-mail cpeale@enquirer.com




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