German haircare giant Wella will let an auditor investigate its takeover by Procter & Gamble after complaints from minority shareholders.

Wella has already acquiesced to calls for an extraordinary general meeting relating to the P&G deal [WAMN: 25-Nov-03], and last week declared it would "welcome" the special audit demanded by a hardcore group of dissident investors.

The rebels hold Wella's non-voting preference stock and have refused to accept P&G's offer of €65 ($79.61; £45.60) per share, arguing the price should be nearer the €92.25 agreed for voting ordinary stock. They are demanding an inquiry into potential conflicts of interest and breaches of fiduciary duty by Wella's senior executives.

Should the extraordinary general meeting sanction the special audit, Wella believes the investigation would clear it of all these accusations. "There can be no doubt at all that the allegations brought will be fully clarified and proven to be baseless," the company commented.

P&G is already guaranteed control of Wella, having agreed earlier this year to buy 78% of voting rights from the German firm's Ströher clan [WAMN: 18-Mar-03]. It has now amassed 99.6% of voting shares but only 81% of total equity -- not enough, claim the dissidents, to allow the US colossus to integrate Wella fully into its operations.

The outstanding shareholders want P&G to pay them off under what is known as a 'domination agreement'.

Data sourced from: Financial Times; additional content by WARC staff