Icelandic investor attributes Elisa uproar to "nationalism"

Thor Björgólfsson denies trying to break up Finnish telecoms company

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"It is strange to say the least. In fact, it is nationalism, which leads to discrimination against some shareholders. It is not good to discriminate against those who do not speak Finnish, especially as more than half of the company is owned by foreigners."
      The company in question is the telecoms operator Elisa - formerly the Helsinki Telephone Company. The severe evaluation was made by Elisa’s largest shareholder, Thor Björgólfsson of Iceland, whose investment company Novator has organised an extraordinary shareholders’ meeting to decide on changes in Elisa’s articles of association and the composition of its Board of Directors.
     
Nearly all of the major Finnish owners of the company have come out against the proposed changes.
      Pension insurance companies have amassed Elisa shares to strengthen the anti-Thor front. Thousands of small shareholders who are against the proposals of Novator are sending proxies to the Finnish Association of Stock Investors (Osakesäästäjien keskusliitto).
      Most recently, the Finnish state, which has a holding of 0.65 per cent of Elisa stock, came out in support of the strategy of the present directors of Elisa.
     
In a telephone interview with Helsingin Sanomat, Thor Björgólfsson analyses the arguments used by his opponents. In his view, they are based on deliberate or unintentional misconceptions.
      Novator does not want to split up Elisa, he says. Instead, the aim of the proposal to alter the articles of association is to clarify the structure of the company and to make it more transparent.
      Björgólfsson says that the change would make it easier to enact foreign subsidiary arrangements along the lines of Nokia-Siemens, if such arrangements were ever to become topical.
      Foreign corporate purchases could be possible, but only at a good price.
      "Why have the Spanish and the Swedes for instance produced international telecommunications companies, but not the Finns who have truly international companies in other fields, such as Nokia and Amer?" Thor Björgólfsson asks.
     
Björgólfsson dismisses the claim that he would want to merge Elisa with his telecommunications companies in Eastern Europe as a misunderstanding. He also uses a somewhat stronger expression: "The claim is pure s**t", Thor says.
      Björgólfsson has sold off all of his East European companies in the field with the exception of two Polish firms. One of them involves a land line network, and the other is a mobile phone company. "There are no plans to combine them with Elisa", he insists.
     
The Icelander also wants two seats on the Board of Directors, and he does not feel that the demand is unreasonable, considering the fact that Novator is currently the largest holder of Elisa stock. Lasse Kurkilahti and Matti Manner do not represent Novator on the Elisa Board, as has been claimed in Finland.
      "When we became major owners of Elisa in connection with the sale of Saunalahti, Keijo Suila (the Chairman of the Board of Elisa at the time) asked us about seats on the board. We answered that we support good people in Finnish business. We were offered a lawyer (Manner) and a corporate manager recognised as Finland’s best businessman (Kurkilahti) and we were not opposed to them, although both lacked experience in this specific field of business", Thor explains.
      However, as he sees it, the two do not represent Novator on the board. "We have not spoken with them about matters related to Elisa", Thor said, describing Manner and Kurkilahti primarily as part of the elite of Finnish business life.
     
Now Novator wants representatives of its own on the Elisa Board. One of them would be Orri Hauksson, an Icelandic citizen and CEO of Novator Finland, who has experience in telecommunications. The other would be a Novator employee with international telecommunications experience, who has not been named, but is likely to be either Icelandic or British.
      Thor Björgólfsson emphasises that his only goal is to boost the share price of Elisa.
      "All else is hypothetical and irrelevant. And we act staunchly within our rights", he adds.
     
The Finnish reaction to his moves came as a surprise to him. "It has been like hysteria - completely unfounded", Thor says.
      In fairness, this attitude is not completely unfamiliar to him. He has confronted it in his own country, and in Bulgaria, for instance, but he says that the intensity of the rejection of outsiders by the elite of Finnish business is unique in his experience.


Previously in HS International Edition:
  Icelandic shareholders hope to restructure management of telecom company Elisa (26.11.2007)
  Icelandic investor among buyers of prime Helsinki real estate (21.10.2006)
  Large Finnish pension insurers are suspicious of Novator´s intentions for Elisa (14.12.2007)
  Decision on Elisa split postponed until late January (29.11.2007)

Helsingin Sanomat