The terror of listed Amsterdam
Buyers who want to get cheap loot on the Amsterdam stock exchange invariably encounter the opposition of activist Frans Faas. With his victory in the Xeikon case, he proves that even small investors can compete with the big players.
A consortium around the Bencis fund had taken the graphics company Xeikon from Lier off the stock exchange at EUR 5.85 per share. Two years later, the acquirer sold Xeikon for 11.75 euros per share to the American group Flint. As a legal successor, he must now put 9.73 euros per share on the table plus about 1.69 euros in rent. The litigating ex-shareholders, who represent almost 5 percent of the capital, will receive almost double the initial offer with EUR 11.42 at the end. Xeikon was listed on the Amsterdam stock exchange. In Belgium, BeursTips publisher Bart Goemaere represented the interests of the ex-shareholders through contacts with Faas.
ORGANIC FRENCH FAAS
Education: teacher of economics and business administration.
Starting a career as an economics teacher and then a researcher at the Court of Audit.
Since the early 1990s, he has represented the interests of investors and asset managers.
2007: founder and CEO Recalcico Beheer, an advocate for good corporate governance.
2008-2012: director MTY Holdings and director De Witte Molen.
Faas is known among our northern neighbors as the ‘protector of the small investor’ or the ‘ogre of the boards’. He played an important role in the battle for small listed companies such as Begeman, EDCC, Dico or Alanheri. At the latter seed producer – meanwhile renamed Witte Molen and sold to the Belgian Laroy – he was a director for many years.
Do you see Xeikon as your greatest victory?
Frans Faas: “It’s a big win, but personally I think other things are even more important. I am especially proud of the GOWP foundation. we recommend the banks that over-mortgage to people who couldn’t afford it. Those loans were based on the future yield of a home. An example: you had a house worth 200,000 euros. A financial intermediary determined that the house was later worth more than double and would continue to rise. You then borrowed 200,000 euros extra with the house as collateral, the investment profits were sufficient to pay the mortgage interest and still pay a profit. When the stock markets started to fall, they could no longer pay their repayments. People with low incomes got into misery because of the financing constructions of the banks. In the meantime, we have recovered millions of euros. Only de Volksbank is still obstructing.’
‘At Xeikon it’s about people who don’t have to eat less bread. Had we lost the case, it would have been annoying for them, but not a disaster. The mortgage affair involved dire situations that we could resolve. I can not stand injustice.’
The battle for Xeikon seven years. Where does the money come from to litigate for so long?
Faas: ‘It’s difficult, I must oblige. Xeikon has cost hundreds of thousands of euros. I put my own business money in it. If you see injustice, you call on the shareholders to get involved. You ask for a small contribution, usually hundreds of euros. But they have often lost. Many are not first to think of more to see money in a few years. If the case drags on for years and you ask for money again, many give up. Fortunately, I can boast of some successes and I am known in the Dutch media. I have clients from 25 countries.’
In the case of an acquisition, an independent party must provide a valuation. Isn’t it worth it then?
Faas: ‘It’s better to throw such an honest opinion in the trash. In the Xeikon case, the Enterprise Chamber has reprimanded the Petercam stock exchange. Petercam had received 280,000 euros for it, but Bencis parroted it.’
Bart Goemaere: ‘You also saw this in the bids for Global Graphics, Sioen and Zenitel in Belgium. The independent valuations were in line with the first offer price. At Sioen and Zenitel, the references have increased their bids. At Global Graphics, not enough shareholders responded.’
Aren’t there also independents on the board of directors to settle a bid?
Faas: ‘There are those who do their job well, but also whose independence can be questioned. Sometimes there is a conflict of interest. Then the directors and managers have a stake in the takeover vehicle and most if they can buy out others cheaply.’
The world of investors in the Benelux is a world we know.
Why do professional players also sell their shares if the price is too low?
Faas: ‘The world of investors in the Benelux is a world we know. They give in in one file because they know they will get something back in another. Many major shareholders sit on each other’s boards of directors. The polder model prevails in the Netherlands: a striving for consensus in order to find a solution together. When bidding, the buyer often follows the same strategy. If the bidder considers a company worth roughly 15 euros per share, he first offers 9 euros and then raises that to 11 euros. The shareholders then think they are doing a good thing, but the buyer rubs his hands. I allow acquirers to make a profit, but it’s not to be excessive.’
goemaere: ‘You also saw Dag at Sioen in Belgium. The analysts did not want to take a position openly, but behind the told they said the first price was too low.’
Types of companies companies more than other types come for a cheap offer?
Faas: Acquirers often take advantage of transient events for the company. For private equity players (which invest in unlisted companies, ed.) debt-free companies are ideal prey. They can saddle the company with debt and thus recover a large part of the acquisition price.’
goemaere: ‘When the reference is taken over, the price plays a major role. They often use external factors that influence the course to turn, such as the corona pandemic at Sioen.’
What business are you still working on?
Faas: ‘I represent the interests of the expropriated bondholders of the former SNS Bank, which ended up in government hands during the financial crisis. After seven years of litigation, the appeal judge decided that the bondholders would get back 90 percent of the face value. But the Dutch state found it necessary to appeal in cassation. That procedure is still going on for a while.’
‘I am also working on opposing Gilde’s squeeze-out offer for DPA Group at EUR 1.70 per share. The temporary employment agency is going at 4 times the gross operating profit of the stock exchange. A mere quid.’
Have you also lost business?
You have to consider the deep enough amounts to pay damages. Otherwise it’s not worth the effort.
Faas: “Only in the first instance. We have always been able to triumph in the latter. I only pick out the most promising cases. You have to, because you can’t lose yourself as a loner. You need to consider more of the significant amounts you have to pay benefits. Otherwise it’s not worth the effort.’
You also made yourself noticed in Belgium, partly due to the continued pressure on the holding company Iep Invest and its real estate subsidiary Accentis.
Faas: By the lack of communication and the undervaluation of the assets, Eep tries to hide the value in the companies in order to buy shares in the meantime. Accentis’ share price has doubled over the past two years. There is more transparency. Part of the goal has been achieved. I’ll leave the rest to Bart.’