Wyser-Pratte and Vendex (A)

Published 06 Jan 2004
Reference 5212
Region Europe

This (A) case describes how Guy Wyser-Pratte, a pro-active investor and corporate governance advocate, puts pressure on Royal Vendex KBB, the leading non-food retailer in the Netherlands, to alter its corporate governance system. In an impassioned speech at the 2002 annual meeting of shareholders, he challenges Vendex Supervisory Director, Harry Langman, to discard the company's dysfunctional corporate governance system by dismantling its anti-takeover structure, and granting more voting rights to its shareholders. How will the Board react and what will be the next step for Wyser-Pratte? Fresh from his victory for increased shareholder rights, corporate raider Wyser-Pratte, together with a coalition of active investors, tries in this (B) case to use these new found rights to influence the strategic direction of the Vendex company. In contrast to Wyser-Pratte's comments in the previous year, one investor - K Capital Partners - pressures management and the Supervisory Board to consider selling the company, in the belief that the conglomerate is undervalued, and that an acquirer would easily pay a 100% to 200% premium over the current share price, thereby maximising shareholder value.

Teaching objectives

The purpose of this case is to allow a discussion on shareholder power and the response of the Supervisory Board in "Rhenan capitalism" countries to this increased shareholder activism. Students can thereby discuss if they believe the motives/arguments of active investors in increasing shareholder value. Or do active investors merely look for short-term gains and a quick exit from their investment?

  • Corporate Governance
  • Investors, Stakeholders and Accountability