NETHERLANDS - The institutional investors Robeco and the €201bn civil service pension fund ABP have voiced support for the temporary protection of industrial conglomerate Stork against Anglo-Saxon hedge funds Paulson and Centaurus.
"The low attendance due to technical barriers shouldn't allow two large shareholders to force the company into an undesired direction," Robeco said in a joint statement with ABP, which is not a Stork shareholder, referring to general meetings.
The statement has been issued just before the court case, today, in which both hedge funds saw their request granted for an inquiry into Stork's refusal to give in to their demand for a split-up of the company.
Stork has taken protective measures - by issuing preferential shares - against Centaurus' and Paulson's plan to sack the supervisory board. Together, the hedge funds have approximately 30% of Stork's shares.
"The developments around Stork have a much further reach than the actual company, and might affect all Dutch listed companies of which management and minority shareholders are being confronted with large shareholders who fundamentally want to change the course of the company," Robeco said.
"Centaurus and Paulson have insufficiently proven that their proposed strategy is the best. Therefore, sacking the supervisory board is premature and not in Stork's interest," corporate governance spokesman Eugene Rebers at ABP commented.
"Perhaps more importantly, the strategy of a company is a matter for the board. If the hedge funds want to pursue another strategy, then they should make a public offer for all of the shares," he said.
"This is a very important case for corporate governance in the Netherlands. Although ABP doesn't hold shares in Stork, as a shareholder in many other companies, it will affect us in similar cases in the future," he explained.
"The low attendance, combined with the lack of a mandatory offer in the Netherlands, implies that both shareholders can force-through their desire, without taking sufficiently into account the position of the minority shareholders," Rebers added.
In Rebers' opinion, the protection should be temporary, because both parties must start a dialogue in the short term.
Robeco reiterated its faith in Stork's board, its vision and its strategy. "The value of the company's share might decrease if Centaurus' and Paulson's wish to split-up Stork is granted," it said.
Under Dutch law, shares are blocked if shareholders use their voting rights. As a consequence, many foreign institutional investors don't use their voting rights because it hampers their freedom of trading.
"We don't oppose a temporary protection, but it shouldn't last longer than six months for a dialogue between the parties," Rients Abma, director of corporate governance platform Eumedion commented.