FREE BRIEF: Strategic disagreements on the board of Panalpina

The strategic destination of Panalpina seems to be in question. The Basel-based forwarder announced on Monday that its Chairman and former CEO, Peter Ulber, would “not stand for re-election”. Mr Ulber, who had a strong career at Kuehne + Nagel before joining Panalpina as CEO, stated that “this decision is in the best interest of Panalpina and all of its stakeholders. The long term goals of the company are best served by electing an independent chairman of the board at this time to further improve on a best in class governance. This process will strengthen the company on its strategic path forward.”

Some of the shareholders are not quite as sanguine. It is reported in the press that Mr Ulber was forced out by unhappy investors, notably Mr Lars Forberg of Cevian Capital, a Swedish ‘activist’ fund. In an interview with the Swiss business publication Bilanz, he savaged the senior management of Panalpina, commenting; “we had a lot of patience for a long time. It’s now used up”. He continues, observing that “this is the typical case of a poorly managed company, of which we have seen many in the last 30 years”.

As an activist investors Cevian Capital is known for putting pressure on managements, so perhaps such comments are not so unusual. However, in the same magazine other, usually less outspoken companies also criticise Panalpina. For example, Edwin Lugo of Franklin Templeton is quoted stating “our patience is coming to an end, because the competition is getting stronger…time is running against us”. In particular shareholders are critical of the influence of the dominant shareholder of Panalpina, the Ernst Goehner Foundation. This foundation has a strong presence on the board but David Samra, of the Artisan International Value Fund is frank in his negative view, saying “we think that the foundation has done a bad job, that it is unable to run the company and that the shareholder structure needs to be changed.”

The problem is the Ernst Goehner Foundation has a 45% holding in Panalpina Weltransport AG. The foundation used to own all of the forwarder but floated a little over half of the company from 2005 onwards, yet its presence on the board still reflects its dominant position at the company. To the apparent fury of some other shareholders, the vice-Chairman of Panalpina, Beat Walti, is also a director at the Ernst Goehner Foundation.

Mr Forberg is demanding that the board consider options such as a merger or sale of Panalpina, commenting that DSV has already expressed interest in the company. What Mr Forberg has to do is convince Mr Walti and the Ernst Goehner Foundation, as they seem not to agree. It is probably a case of ‘watch this space’. 

Source: Transport Intelligence, November 22, 2018

Author: Thomas Cullen


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