Board hopping

Swedes Take Second Seat at Bilfinger Top Table

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Bilfinger has been moving away from construction and focusing on engineering services.
  • Why it matters

    Why it matters

    Construction giant Bilfinger has been remodelling itself as an industrial services provider but has been hit by recent energy market upsets. Cevian’s move suggests it wants more control over future direction.

  • Facts

    Facts

    • Cevian Capital has a 25.6 percent majority share in Bilfinger.
    • Bilfinger’s share price has fallen from €61 ($77) to less than €50 since CEO Roland Koch’s resignation in August.
    • Bilfinger will elect a new chairman in November.
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    Audio

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Until recently, Cevian Capital had a clear view on the change of direction at Bilfinger, the German construction company of which it is the largest shareholder. The Swedish investor supported its new focus on industrial services, said its Germany chief Jens Tischendorf three years ago, when the investment firm first took a seat on Bilfinger’s supervisory board.

However, after three profit warnings, Cevian wants to increase its influence.

Bilfinger’s board has taken on the air of a game of musical chairs recently. Following the profit warnings, Roland Koch, the chief executive and head of the supervisory board, resigned in August. Former chief Herbert Bodner has replaced him on a temporary basis.

Eckhard Cordes will become a board member in November. The 63-year-old is a business economist with a doctorate, and was chairman of Düsseldorf retail giant Metro from November 2007 until 2011. Two years ago, he became a partner at Cevian.

Mr. Cordes’s appointment means that Cevian will now have a second representative on Bilfinger’s controlling board, with Mr. Tischendorf being the other.

The new chairman of the supervisory board must find a new leader of the management board as quickly as possible.

Mr. Cordes will replace Bernhard Walter, the former CEO of Dresdner Bank, who led Bilfinger for 16 years. He is due to step down in November, after which the board will elect a new chairman.

The new chairman of the supervisory board must find a new leader of the management board as quickly as possible. Bilfinger, which was once seen as extremely solid, is effectively lame at the moment. Many investors as well as workers are anxious after the profit warnings and Mr. Koch’s hectic departure. The image of the once model group, based in Mannheim, central Germany, has suffered considerably.

Bilfinger’s share price has fallen from €61 ($77) to less than €50 since Mr. Koch’s resignation in early August.

Cevian’s move last month to increase its share from 20.2 to 25.6 percent may help the price to recover in the longer term, and the Swedish firm has also not ruled out further increasing its share.

 

The author reports on the construction, wind and solar energy sector for Handelsblatt. To contact the author: weishaupt@handelsblatt.com

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