Eurocement seeks Galchev Board seat at LafargeHolcim

Eurocement Holding AG, the second-biggest shareholder in Holcim Ltd, said Wednesday it is nominating its owner, Filaret Galchev, for a position on the Board of the company that would be created by the planned tie-up between Holcim and Lafarge.

The proposed nomination of Galchev in an emailed statement may signal that Eurocement, which holds a 10.8 per cent stake in Holcim, is willing to support the merger with Lafarge at next month's shareholder vote. The firm, however, gave no indication that it accepts the current terms of the deal.

"On 14th April 2015 Eurocement Holding AG, which is the second-largest shareholder of Holcim AG, has answered to Prof Dr W Reitzle’s proposal to join the LafargeHolcim Board of directors by nominating Filaret Galchev, founder and owner of the Eurocement group, as candidate for such position, according to the regulations. Eurocement Holding AG expects now that Holcim AG Board of directors and Prof Dr W  Reitzle, as chairman of the Board, will honour their proposal," the statement said.   

The move follows recent press comments that Eurocement is not in favour of the Lafarge and Holcim merger despite the recently revised terms. Eurocement's request also comes a day after Holcim and Lafarge released a list of proposed board members for the new company that didn't include Mr Galchev.

Holcim needs the backing of two-thirds of its shareholders at the meeting on 8 May to approve a capital increase to fund the proposed deal. Bernstein Research notes that it is possible Galchev is hedging his bets in case the deal proceeds, but still votes against it. It also believes other key shareholders of Holcim have yet to make up their minds, wanting to meet the newly-announced CEO, Eric Olsen, first.

Nevertheless, the research house adds that the probability of the deal proceeding has now significantly increased. "... we expect today's announcement will be interpreted by the market as if the deal is done, as a ‘yes’ vote from Eurocement would be enough to seal the deal," Bernstein Bernstein analyst Phil Roseberg wrote in a note following the announcement.