April 17, 2018 / 3:41 AM / 9 months ago

UPDATE 1-Swiss group Sika Q1 sales scrape past estimates amid Saint-Gobain battle

(Adds guidance, background on takeover battle)

April 16 (Reuters) - Swiss construction chemicals group Sika reported first-quarter sales slightly above expectations on Tuesday as it awaits a court verdict in its bitter takeover battle with France’s Saint-Gobain.

Sika, whose products were used to help waterproof the Gotthard railway tunnel under the Alps, said sales rose 11 percent to 1.55 billion Swiss francs ($1.61 billion) in the three months ended March 31. That beat forecasts of 1.54 billion francs in a Reuters poll.

Sales growth in local currencies was 11 percent, as the company benefitted from a string of recent acquisitions and increased activity in the global construction market.

The swiss firm set a sales target of 7 billion Swiss francs ($7.29 billion) for 2018.

For the year, Sika said its EBIT and net profit should increase at a “disproportionately high rate”.

The latest court decision in Sika’s ongoing battle with Saint-Gobain is expected in the next few weeks on Sika’s attempts to thwart the hostile approach by reducing its founding Burkard family’s voting rights to 5 percent.

Sika’s actions were upheld by a court in 2016 but the family has appealed against the decision, which is now being reviewed by a higher court in the Swiss canton of Zug.

The Burkard family, whose 16 percent holding came with nearly 53 percent of the voting rights, have been locked in a dispute with Sika’s management for more than three years.

The case has been closely observed by investors, who see it as a test case for the rights of minority stakeholders. The takeover has also been opposed by Columbia Threadneedle Investments, Fidelity International and the Bill & Melinda Gates Foundation Trust.

Sika, whose chemicals are also used in the automotive industry, has opposed the deal saying a tie up with Saint-Gobain did not make industrial sense. The company’s board has said it would also be disadvantaged by being controlled by a direct rival which only owned a minority of the share capital. ($1 = 0.9603 Swiss francs) (Reporting by John Revill in Zurich and Shalini Nagarajan in Bengaluru; Editing by Gopakumar Warrier)

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