Icelanders offer compromise in initiative on Elisa changes

Novator backs down on demand for extensive structural change in Finnish telecoms company

Thor Björgólfsson

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Novator, a company run by Icelandic investor Thor Björgólfsson, indicated on Wednesday that it was backing down on its calls for changing the corporate structure of the telecommunications service provider Elisa.
      Novator, the largest single holder of Elisa stock, has been calling for extensive changes in the Finnish company's corporate structure, and its Board of Directors.
      "We are not taking a religious attitude to this", says Novator's Orri Hauksson, who is responsible for the company's Elisa holdings.
      "We have discussed this matter for a long time (With the board) and we are happy to withdraw it from the agenda."
      More important for Novator than changing the corporate structure is to get representation on the Elisa Board of Directors", Orri Hauksson says.
     
Novator does not want to get rid of the entire Board of Directors. "We hope that most of the present members will stay. We have had our greatest differences with the leadership of the board."
      The main conflict is seen to be with the Chairman of the Board, former Vaisala CEO Pekka Ketonen.
      Novator wants two experts in the telecommunications field on the Elisa Board. One of these is 36-year-old Hauksson, who has served for four years as head of development of Iceland's state-run telecommunications operator. Novator has not revealed the identity of its second candidate.
     
In late November Novator called for the convening of an extraordinary meeting of Elisa's shareholders. The biggest owner of Elisa was dissatisfied with trends in the value of the company's shares, and wanted changes in its corporate structure. Novator wanted Elisa to focus more on growth and branching out internationally.
      In Finland, the Novator demands have sparked an unprecedented reaction among other shareholders. In addition to the present Board of Directors, large pension companies with Elisa stock, as well as small shareholders are taking a suspicious view of the aims of the Icelandic company.
      Now Novator appears to have concluded that there is no point in holding discussions on its proposal in the current inflamed situation. "We did not want to start a fight. However, sometimes it can be good to rock the boat a bit, but fighting is not an end in itself."
      Novator has probably also calculated that the company cannot get its demands through at the extraordinary shareholders' meeting on January 21st. Changing the corporate structure would require a change in the articles of association, and a two-thirds majority of voting shares.
     
Novator believes that a new structure would offer better possibilities for boosting the value of Elisa's shares. Hauksson says that Novator has also been asked if it wants to sell off its holding in Elisa. "We don't want to sell, because we feel that Elisa has potential."
      Hauksson will not say if the potential buyers were from the east or west. "Contacts have been made from many directions. There have been strategic buyers and financial buyers, as well as entities that we know nothing about."


Previously in HS International Edition:
  Large Finnish pension insurers are suspicious of Novator´s intentions for Elisa (14.12.2007)
  Icelandic investor attributes Elisa uproar to "nationalism" (7.1.2007)
  Elisa Board Member expresses disapproval of policy chosen on corporate restructuring (13.12.2007)
  Decision on Elisa split postponed until late January (29.11.2007)
  Icelandic shareholders hope to restructure management of telecom company Elisa (26.11.2007)

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