Bloomberg News

Swiss Investor Ebner Rides High: Bloomberg Profile

September 12, 1997

(Corrects spelling of Buffett in third paragraph, fifth screen. Adds that Credit Suisse offer will begin Sept. 16 in 10th paragraph after CS delayed offer by one day.)

Before Swiss financier Martin Ebner triggered Credit Suisse's 13.1 billion Swiss franc ($8.8 billion) offer for Winterthur Insurance Co. last month, investors wondered whether he had lost his Midas touch.

His four-year legal battle with Union Bank of Switzerland over shareholder rights -- his BK Vision AG fund is UBS's biggest shareholder -- was stalled. BK Vision last year lost 1 percent, while the Swiss Performance Index gained 20 percent.

And Ebner, 52, who used to object to photographers at his rare public appearances, even launched an advertising campaign to attract small investors to his funds, raising concern his institutional clients were deserting him.

Now he's back. And the steely eyed former trader who brought shareholder activism to Switzerland and amassed an estimated private fortune of up to 1.5 billion francs, may use his clout to buy more stakes abroad, investors said.

``The Credit Suisse-Winterthur deal was quite a coup for him,'' said Hans Kaufmann, an analyst and fund manager at Bank Julius Baer & Co. AG. ``Now, his war chest might be big enough to do something similar outside Switzerland, say in Germany.''

Some German shares already are under Ebner's spell. In the days after Credit Suisse said it will buy Winterthur, Commerzbank AG shares soared almost 10 percent on traders' talk Ebner was investing in Germany's third-largest bank.

Bow-Tied Trader

That brought a sense of deja vu. Before Switzerland introduced screen-based share trading last year, bow-tied Ebner could add a premium to a stock he favored by merely showing up on the Zurich stock exchange trading floor. These days, he also throws his weight around companies' boardrooms.

While Ebner said he currently has no Commerzbank shares, he added that the bank has ``great potential'' if the bank's managers squeeze more value out Commerzbank.

Having set up his boutique BZ Group with a 7 million franc loan in 1985, he has mainly focused on Swiss companies.

Ebner's funds will hold about 7 percent of Credit Suisse after exchanging his 25 percent stake in Winterthur during the offer that begins Sept. 16. Ebner already owns about 10 percent of UBS, and has a stake in Swiss Bank Corp.

He also owns about 15 percent of Roche Holding AG, and has a stake in Ems-Chemie Holding AG, a Swiss chemicals company. Ems Chairman Christoph Blocher, the Swiss populist politician vocally opposing closer ties with the European Union, is one of Ebner's closest business associates.

Outside Switzerland, Ebner owns a stake in Glaxo Wellcome Plc, a drug company, a major stake in AGA AB, a Swedish industrial gas producer, and an 0.5 percent stake in German chemicals company Hoechst AG. He also holds a 22 percent stake in Tularik Inc., a privately held U.S. biotechnology company.

Shake, Rattle Role

``He's shaken up many a sleepy Swiss company whose managers had forgotten about shareholders,'' said Nicholas Berry, a U.K. investor who owns about 3 percent of Swiss transport company Danzas Holding AG and tried to do the same.

In its peak year 1993, BK Vision, which mainly invested in UBS shares, returned 73 percent, while the Swiss Market Index gained 37.5 percent. Pharma Vision 2000 AG, mainly invested in Roche, returned 80.9 percent in 1993.

Since then, his investment funds, which also include Stillhalter Vision AG, Gas Vision AG and OZ Holding AG, have performed in line with or lagged the index. Ebner's reputation also suffered as he failed to win the row with UBS, the most public corporate battle in Switzerland to date.

UBS's 1994 plan to introduce a single bearer share, which would dilute the rights of registered shareholders, is still held up in courts after Ebner, who mainly held registered shares, took legal action - so far without success.

Ebner and UBS already locked horns in 1992, when the bank effectively sacked Ebner's friend Blocher, then a UBS board member, over his anti-European stance, and again in 1996, when Ebner opposed the election of then-Chief Executive Robert Studer as UBS chairman -- to no avail.

Sharp Strike

What eluded him at UBS -- a quick, sharp strike -- he managed at Winterthur. Ebner elbowed Winterthur to ask Credit Suisse to make an offer by buying a quarter of the insurer within six months. Winterthur Chairman Peter Spaelti approached Credit Suisse Chairman Rainer Gut after Ebner told the insurer he seeks a majority stake, and suggested he might sell his holding to a foreign insurer such as Allianz AG.

``They've only done it because of Ebner,'' said Daniel Haeuselmann, an analyst at Union Bank of Switzerland.

In April, Ebner announced he had begun building a stake in Winterthur and said he owned 14 percent in Switzerland's second- biggest insurer. In July, he held 18.3 percent. In August, he owned about 25 percent. With Ebner's help, Winterthur shares almost doubled this year.

``His style is similar to Warren Buffett's,'' said Frank Jud, an analyst at Darier Hentsch & Cie. ``He takes stakes in a few companies he believes have high potential.''

That earned him the respect of analysts and investors, though the public remains skeptical. Ever since Ebner suggested UBS get rid of its retail banking arm, which would have cost thousands of jobs, Ebner, whose own operation has about 50 employees, has been criticized as a ``job killer.''


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