Chris Hohn’s activist hedge fund has called for a chairman to abandon a proposed €8.5bn (£7.4bn) takeover or face being ousted.
The Children’s Investment (TCI) Fund has previously made clear its opposition to a deal under which French aircraft-engine maker Safran, in which it owns a 4.1 per cent stake, is due to buy plane seat-maker Zodiac.
TCI’s opposition to the deal intensified yesterday after Zodiac published financial figures. Safran yesterday expressed “its confidence in its own ability to restore the operating profitability of the businesses currently in difficulty”.
But Hohn today wrote to Safran’s chairman Ross McInnes saying the company “must act responsibly and pull out of the deal now”. TCI has also called for shareholders to be given a vote on the deal.
In today’s letter, Hohn described the deal as an “outrageous overpayment”, adding: “Safran shareholders will suffer huge value destruction if the merger goes ahead.
“Also, Mr McInnes, it is now clear why you do not want Safran shareholders to have a fair vote on the merger before you take over Zodiac. The deal cannot be justified and you do not want shareholders to question your flawed judgement.
“If you do not cancel the deal it will be clear evidence that you are not competent to continue as chairman of Safran, so we will call on Safran shareholders to remove you from the board at the AGM in June.”