Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Panalpina Welttransport Holding / Event-Driven

This insight is a kind of public service announcement for investors looking at the <a href="https://www.smartkarma.com/entities/22460" target="_blank" data-smartkarma-citation="entities:22460:1">Panalpina Welttransport Holding (PWTN SW)</a> situation as it might affect the likely upcoming Extraordinary General Meeting that the Ernst Göhner Foundation requested of Panalpina, and to which Panalpina has <a href="http://www.panalpina.com/www/global/en/home/newsroom.html#/pressreleases/announcement-of-extraordinary-general-meeting-to-implement-one-share-one-vote-regime-2840335" target="_blank">acquiesced</a>. The agenda item of the EGM requested is to implement a "One Share One Vote" system. Activist Cevian has come out against the proposal by the Ernst Göhner Foundation. This sounds counterintuitive except for one odd legal angle.The Foundation's ostensible goal is to ensure that the vote is "fair" so that Cevian and Artisan Partners can vote their full stake after having been capped at 5% for many years because of Article 5 in the <a href="http://www.panalpina.com/content/www/global/en/home/investors/corporate_governance/_jcr_content/contentParSys/download_6/downloadList/german_version_only.spooler.download/20170503%20Statuten%20PAW%20-%203.05.2017%20-%20EN.pdf" target="_blank">Panalpina Articles of Association</a>. The more cunning aspect of this is that, as per the Panalpina <a href="http://www.panalpina.com/www/global/en/home/newsroom.html#/pressreleases/announcement-of-extraordinary-general-meeting-to-implement-one-share-one-vote-regime-2840335" target="_blank">announcement</a>...<blockquote>In a letter addressed to Panalpina's Board of Directors, minority shareholder Cevian had recently questioned the practice to fully admit EGF with all its voting rights at the Company's shareholders' meetings. Cevian took the position that the voting restriction of 5% must be applied to all shareholders and, hence the voting power of EGF must be reduced to 5%. An ad hoc board of independent directors (BoiD) consisting of five directors (without representatives of EGF and Cevian) and chaired by Thomas E. Kern, is currently evaluating the situation based on expert opinions submitted by each of EGF and Cevian and based on independent expert advice obtained by the BoiD.</blockquote>The Foundation knows that their position may be legally weak, and their position could be capped at 5% rather than grandfathered. Indeed, the "independent expert advice" obtained by Cevian includes the opinions of "four leading Swiss stockbrokers" who had come to the conclusion that the Foundation had been unlawfully excluded from the 5% cap, according to this Reuters <a href="https://de.reuters.com/article/schweiz-panalpina-welt-idDEKCN1QF0LT" target="_blank">article</a> on the 26th. The company states that the Ernst Göhner Foundation is and has been exempted from this rule because of "grandfathering" because it owned the shares before the implementation of the rule, but there is nothing in the Articles of Association which grants the EGF that exemption. The full Cevian press releases in English and German are available through their spokesperson and are attached below (at the bottom of the insight).Another Reuters <a href="https://www.nasdaq.com/article/panalpina-investor-cevian-comes-out-against-changes-to-voting-rules-20190226-00171" target="_blank">article</a> discussed the situation, with quotes from Cevian, and added this tidbit at the end.<blockquote>An ad hoc board of independent directors consisting of five directors, without representatives of EGF and Cevian...will review the proposal and decide how the voting on it will take place at the extraordinary general meeting," spokeswoman Edna Ayme-Yahil said.</blockquote><hr>Investors should note.....The last paragraph of Article 5 of the <a href="http://www.panalpina.com/content/www/global/en/home/investors/corporate_governance/_jcr_content/contentParSys/download_6/downloadList/german_version_only.spooler.download/20170503%20Statuten%20PAW%20-%203.05.2017%20-%20EN.pdf" target="_blank">Panalpina Articles of Association</a> says "No entries shall be made in the register of shareholders following the dispatch of the convocation to the Shareholders’ Meeting until the day after the Shareholders’ Meeting." This is a little different than is the case for many large Swiss companies where they give the convocation and investors may subsequently register their shares.<div class="content-remarks">
For <a href="https://www.smartkarma.com/entities/27907" target="_blank" data-smartkarma-citation="entities:27907:1">Novartis AG (NOVN SW)</a>, which held its AGM today (28 Feb 2019), the deadline for registering shares was 3 days prior to the AGM as shown on p6 in the Organizational Notes on the <a href="https://www.novartis.com/sites/www.novartis.com/files/2019-novartis-agm-notice.pdf" target="_blank">AGM Notice</a>.
<a href="https://www.smartkarma.com/entities/22504" target="_blank" data-smartkarma-citation="entities:22504:1">Temenos Group Ag (TEMN SW)</a> last year set their registration deadline 13 days ahead of the AGM, which is further away, but the <a href="https://www.temenos.com/globalassets/abt/ir/agm/2018/temenos_agm_2018_eng.pdf" target="_blank">Convocation Notice</a> had been sent 47 days before the AGM.
</div>In Panalpina's case, if you are not registered by the time the company sends out the convocation, there is no requirement for the company to admit your shares to the register even if there is plenty of time to do so (though the Board can make exceptions to the entry restriction).For investors interested in or concerned about the situation, there are measures which may be advisable to implement ASAP to ensure you can vote.

This insight is a kind of public service announcement for investors looking at the Panalpina Welttransport Holding (PWTN SW) situation as it might affect the likely upcoming Extraordinary General Meeting that the Ernst Göhner Foundation requested of Panalpina, and to which Panalpina has acquiesced. The agenda item of the EGM requested is to implement a "One Share One Vote" system. Activist Cevian has come out against the proposal by the Ernst Göhner Foundation. This sounds counterintuitive except for one odd legal angle.The Foundation's ostensible goal is to ensure that the vote is "fair" so that Cevian and Artisan Partners can vote their full stake after having been capped at 5% for many years because of Article 5 in the Panalpina Articles of Association. The more cunning aspect of this is that, as per the Panalpina announcement...In a letter addressed to Panalpina's Board of Directors, minority shareholder Cevian had recently questioned the practice to fully admit EGF with all its voting rights at the Company's shareholders' meetings. Cevian took the position that the voting restriction of 5% must be applied to all shareholders and, hence the voting power of EGF must be reduced to 5%. An ad hoc board of independent directors (BoiD) consisting of five directors (without representatives of EGF and Cevian) and chaired by Thomas E. Kern, is currently evaluating the situation based on expert opinions submitted by each of EGF and Cevian and based on independent expert advice obtained by the BoiD.The Foundation knows that their position may be legally weak, and their position could be capped at 5% rather than grandfathered. Indeed, the "independent expert advice" obtained by Cevian includes the opinions of "four leading Swiss stockbrokers" who had come to the conclusion that the Foundation had been unlawfully excluded from the 5% cap, according to this Reuters article on the 26th. The company states that the Ernst Göhner Foundation is and has been exempted from this rule because of "grandfathering" because it owned the shares before the implementation of the rule, but there is nothing in the Articles of Association which grants the EGF that exemption. The full Cevian press releases in English and German are available through their spokesperson and are attached below (at the bottom of the insight).Another Reuters article discussed the situation, with quotes from Cevian, and added this tidbit at the end.An ad hoc board of independent directors consisting of five directors, without representatives of EGF and Cevian...will review the proposal and decide how the voting on it will take place at the extraordinary general meeting," spokeswoman Edna Ayme-Yahil said.Investors should note.....The last paragraph of Article 5 of the Panalpina Articles of Association says "No entries shall be made in the register of shareholders following the dispatch of the convocation to the Shareholders’ Meeting until the day after the Shareholders’ Meeting." This is a little different than is the case for many large Swiss companies where they give the convocation and investors may subsequently register their shares.
For Novartis AG (NOVN SW), which held its AGM today (28 Feb 2019), the deadline for registering shares was 3 days prior to the AGM as shown on p6 in the Organizational Notes on the AGM Notice.
Temenos Group Ag (TEMN SW) last year set their registration deadline 13 days ahead of the AGM, which is further away, but the Convocation Notice had been sent 47 days before the AGM.
In Panalpina's case, if you are not registered by the time the company sends out the convocation, there is no requirement for the company to admit your shares to the register even if there is plenty of time to do so (though the Board can make exceptions to the entry restriction).For investors interested in or concerned about the situation, there are measures which may be advisable to implement ASAP to ensure you can vote.

Switzerland

Novartis AG manufactures pharmaceutical and consumer healthcare products. The Company uses innovative science and digital technologies to create transformative treatments in areas of great medical need. Novartis offers patent protected prescription medicine and generic pharmaceuticals and biosimilars.

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Novartis (NOVN SW)

The Mechanics of the Panalpina Vote

This insight is a kind of public service announcement for investors looking at the Panalpina Welttransport Holding (PWTN SW) situation as it might...

Travis Lundy

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