RBR Capital Advisors


EQS Group-News: RBR Capital Advisors / Key word(s): Miscellaneous

21.03.2016 / 18:00
The issuer is solely responsible for the content of this announcement.


March 21, 2016

Dear shareholders of gategroup,

Gerard van Kesteren has courageously accepted to be proposed for re-election by
the very same board that had unanimously voted to oust him only a month ago.
Everybody who knows Gerard van Kesteren understands that this was not a
light-hearted decision for him. We understand that Gerard only accepted the
invitation to re-join the board with the guarantee that corporate governance at
gategroup will be substantially improved. Also according to our understanding
Gerard van Kesteren demanded among others the following:

1. The current chairman Andreas Schmid announces to step down after a year as
the chairman of gategroup;

2. Several concrete measures to improve corporate governance and operating
performance at gategroup.

As we understand from today's press release from gategroup the first requirement
has been met. Given that this was a negotiation between the company and Gerard
van Kesteren as a candidate we believe Gerard van Kesteren has the right to
inform you about the decision making process should you, the shareholders, ask
him. We encourage you to do so as it is an important element to get the full
picture and will enable you to cast an informed vote at the upcoming AGM. We are
excited by the progress that Gerard van Kesteren has achieved in such a short
period of time.

Nevertheless, we remain concerned and are convinced that much more needs to be
done to restore proper corporate governance and a healthy state of affairs at
gategroup. Let us just review the board's decision to reinstate Gerard van
Kesteren: only a month ago the board unanimously voted to dismiss Gerard van
Kesteren and commented negatively on his performance as board member. Now they
backtrack without any change of the material facts. Even though we appreciate
that the board has reversed the decision to dismiss Gerard van Kesteren it
doesn't alleviate the fact that the initial decision was a serious mistake,
which now risks hampering target-oriented decision making within the board. Last
year gategroup spent CHF 1.5 million of shareholders' money to fight its largest
shareholder and avoid a fair vote at the AGM. In speeding up the process of
renewal, the board would have an opportunity to limit this wasteful spending.

Gategroup listed in 2009 with an excessive management and board re-numeration
package with no operational targets attached. Chairman Andreas Schmid still
holds roughly 250'000 shares which are currently worth about CHF 10 milion from
that program. The infamous fraud case from 2011 had no consequences for any of
the board members that remained comfortably in their seats despite a clear lack
of control and oversight. Failings in corporate governance are ongoing and
detailed in our previous letter to the board and shareholders as well as the
attached presentation.

Furthermore, despite management claiming the opposite, operating performance
continued to deteriorate significantly in 2015. While local currency sales grew
by 3.3%, the number of employees increased by 4% leading to deterioration in
productivity. Other operating expenses excluding restructuring cost increased by
7% in CHF and dramatically more in local currency. The most shocking increase
came inconsulting and legal fees which increased by over 35% in CHF to CHF 41
million. To claim that cost cutting is on track is preposterous.

We believe it is appropriate to give the new management some time to execute on
improving operating margins to an acceptable level. But we do not believe that
after eight years of mediocre performance and weak corporate governance chairman
Andreas Schmid should be re-elected even for one year.

In addition, if you wish to express your own observations as a significant
shareholder of gategroup with ISS, the proxy voting consultant, you may contact
Nelson Seraci who covers gategroup:Nelson.Seraci@issgovernance.com.

As the largest shareholder in gategroup, we have made abundantly clear that it
is not our intention to gain undue weight or influence on the board of
directors. Our desire is to find the best possible leadership to make gategroup
great again. We are open to a compromise to get the dealallshareholders deserve.
In this spirit we are prepared to offer Andreas Schmid to pull back the
candidacy of Rudolf Bohli for the board if he retires already this year. We
support Nils Engel's candidacy as he is a strong candidate who will work towards
bringing about the right change.

As far as the succession plan for chairman Andreas Schmid is concerned, we are
very excited to report that we have had discussions with several very high
profile candidates who are willing to accept the chairmanship once it is
vacated. Needless to say that such a decision should not be rushed as a proper
due diligence is required. Nevertheless we believe with the good faith of all
parties involved, a successor could be announced within a few weeks. To conduct
such a process ahead of the AGM seems unrealistic. Nevertheless, assuming that
the current chairman is not being re-elected, we are convinced that the current
board has more than enough qualified members to be able to fulfil its mandate in
the interim.

In case Andreas Schmid is unwilling to step down ahead of the AGM, we recommend
you to vote at the AGM to:

-Not re-electAndreas Schmid as chairman or a member of the board

-Not re-electRemo Brunschwiler and Anthonie Stal for the board of directors

-Re-electthe other current members of the board including Gerard van Kestern as
proposed by the board of directors

-ElectNils Engel as a new member to the board of directors

-ElectRudolf Bohli as a new member to the board of directors in case Andreas
Schmid does not step down ahead of the AGM

Should you have any further questions or suggestions we would be delighted to
talk to you at your convenience.


RBR Capital Advisors AG
Rudolf Bohli

Cologny Advisors LLP
Jonathan Herbert

Additional features:


21.03.2016  This Corporate News was distributed by EQS Schweiz AG. www.eqs.com -
news archive: http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.

447453  21.03.2016 

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