UPDATE 1-Rhoen shareholder to contest takeover hurdle vote

06/13/2013

* Rhoen says shareholder B. Braun to make legal challenge

* AGM voted to remove barrier to takeovers

* Rhoen says votes cast on behalf of B. Braun invalid (Rewrites throughout, adds shares)

By Ludwig Burger and Frank Siebelt

FRANKFURT, June 13 (Reuters) - A Rhoen-Klinikum investor who opposed a takeover of the German hospitals chain will contest a shareholder vote to remove a barrier to any future deals, Rhoen said.

Rhoen owners late on Wednesday unexpectedly voted to scrap a requirement for shareholders holding 90 percent of its capital to approve major decisions.

That could put Rhoen back in the sights of diversified healthcare group Fresenius whose 3.1 billion euro ($4.1 billion) takeover attempt was thwarted last year

However, the motion was only passed after votes belonging to the owner of medical supplies maker B. Braun, a shareholder who contested the Fresenius deal, were dismissed as invalid.

Rhoen on Thursday said it had been notified by B. Braun's holding company that it and fellow shareholders would fight the vote in court. A spokeswoman for B. Braun declined to comment.

The legal challenge means Rhoen is unable to implement the vote for now.

B. Braun competes with Fresenius in medical equipment such as infusion and tube feeding supplies as well as dialysis machines. The privately held group risks losing an important client if Rhoen became part of Fresenius' hospitals division.

B. Braun and unlisted rival hospital chain Asklepios last year torpedoed Rhoen's attempted tie-up with Fresenius, buying enough Rhoen shares between them to have a blocking minority.

The tussle kept a raft of deal-starved merger arbitrage hedge funds on tenterhooks in the weeks leading up to Fresenius eventually walking away from its bid.

Rhoen's Chairman and founder Eugen Muench said on Thursday that B. Braun's representative failed to show he was eligible to vote at Wednesday' annual general meeting.

Three law firms advised him to dismiss B. Braun's vote, he said.

Rhoen cautioned that even if the 90 percent acceptance hurdle is eventually removed, a fresh bid would not be certain.

Rhoen shares surged more than 12 percent on Thursday, paring gains to 5.8 percent by 1500 GMT.

"Chances for another attempt to take over Rhoen-Klinikum have clearly increased", despite the legal challenge, Commerzbank analyst Volker Braun said.

If the 90 percent clause is removed from Rhoen's bylaws, future strategic moves would require approval by only 75 percent of shareholders, as is common in Germany.

Fresenius declined to comment, but it has previously said it remained in principle interested in Rhoen.

($1 = 0.7498 euros) (Editing by Erica Billingham)



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