Protector of Austrian Industry Jewels Turns Into a Raid Target

(Bloomberg) -- B&C Privatstiftung, a trust that sees its job in protecting Austrian industry against foreign raiders, says it’s become the target of a raider itself -- and one from home.

Protector of Austrian Industry Jewels Turns Into a Raid Target

The foundation, which controls fiber maker Lenzing AG, aluminum maker Amag Austria Metall AG and rubber maker Semperit AG and is looking for a fourth asset, is targeted by Austrian investor Michael Tojner in a hostile attempt, B&C Chairman Wolfgang Hofer said in a statement on Saturday. UniCredit SpA is also involved in the attempt, Hofer said.

“We will do all we can to prevent that our companies are hollowed out and that substantial funds are pulled out of the B&C Group,” Hofer said in the statement. “We never pursued quick and short-term profits. We stand by our mandate and our companies and will continue this avenue decisively.”

UniCredit SpA and its Austrian unit Bank Austria declined to comment. Tojner didn’t respond to requests for comment, but told daily newspaper Der Standard: “We’re looking at thousands of things. Maybe we also looked at B&C.”

The fight over B&C is the echo of a unique structure that Bank Austria set up about the turn of the century to prevent its industrial assets from being sold indiscriminately after its takeover by Germany’s HypoVereinsbank. Austria’s then biggest bank set up B&C Privatstiftung as a trust and endowed its industry stakes to it, retaining only the right to dividend payments.

After Italy’s UniCredit took over HVB and Bank Austria, it tried to sell those non-bank assets, an effort complicated by the intractable foundation. After other buyers shied away from the structure, the Italian bank eventually sold the rights to the dividends to B&C Privatstiftung itself in 2008.

B&C says it paid 1.2 billion euros ($1.4 billion) to UniCredit and the lender gave up all future rights to the trust in return. However, the trust’s deed still lists HVB’s shareholders -- The German bank is fully owned by UniCredit -- as its beneficiaries, according to Austria’s company register. That’s the avenue through which Tojner is proceeding, according to a report in Der Standard on Saturday.

Tojner, a real estate investor and owner of Montana Tech Components AG and of Global Equity Partners, has offered UniCredit 100 million euros for the beneficiary rights to the trust, another 150 million euros if the trust’s board is replaced, and he would share half of the dividend payments with UniCredit, according to Der Standard.

“What this comes down to is to sell those rights a second time,” B&C said in the statement.

The move comes as B&C, whose mission is “to promote Austrian entrepreneurship,” seeks to ally itself with Chancellor Sebastian Kurz’s conservative-nationalist government, which is tightening the grip on state-owned companies and plans to set up a fund for strategic investments.

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