UK/NETHERLANDS - Hermes Focus Asset Management and the £28bn (€31.3bn) Universities Superannuation Scheme (USS) have agreed to tender their shares in Océ, as part of a takeover bid of the company by rival printing firm Canon, and USS has vowed to try and change Dutch corporate takeover rules.
It follows an unsuccessful request by Hermes and USS to the Enterprise Court of Appeals in Amsterdam for an investigation relating to the negotiations between Océ and Canon and the tender offer for shares. They also asked for the suspension of voting rights on preference shares and the appointment of additional independent directors.
The two organisations requested the hearing - which took place on 3 March 2010 - for the court "to consider the deteriorated position of minority shareholders following the recently changed corporate governance of Océ, which will take effect once Canon declares its offer unconditional, and to take measures to restore and safeguard the position of minority shareholders".
However, the court dismissed the requests and on 4 March Canon and Océ confirmed 71% of the shares had been tendered, making the offer unconditional. But the remaining shareholders were given until 19th march to tender their shares under a post-acceptance period for immediate acceptance and without the right to withdraw them.
Elizabeth Fernando, deputy CIO of USS, said: "After careful consideration, USS has decided to tender its shares in Océ to Canon as part of its takeover bid. We were unable to satisfy ourselves that the current corporate governance arrangements would provide us with sufficient safeguards to protect the future value of our investment and therefore felt we had no option but to tender to the bid."
She also confirmed USS will be "working with other investors in the Dutch market to actively encourage changes to the Dutch takeover code, to ensure minority interests are better protected in similar situations in the future, and to ensure the Dutch market remains an attractive market for both companies and investors".
In a statement, Hermes Focus Asset Management said its earlier stated concern, that the offer price for Océ does not appropriately reflect its value, "is unchanged", and added: "In light of the uncertain position of minority shareholders under Océ's new governance structure, Hermes has concluded that its clients' interests are best served by tendering its shares."
Elsewhere, USS has joined forces with the Railways Pension Trustee Company (Railpen) to pool their "governance expertise and resources to convene a voting alliance". The two organisations have agreed a common policy on governance-related matters, although they will cast their votes individually.
The alliance will cover companies in the FTSE All-Share and hope to provide an "infrastructure for engaged voting for other pension funds - domestic and overseas - in due course".
In a policy statement, the two pension funds said the agreement aims to address issues that are either not covered by the Combined Code, require greater emphasis or that are specifically left open for shareholders to resolve with a company's board.
It said the alliance would not provide voting advice on corporate actions, matters relating to a change of control or sensitive shareholder proposals. And while the policy sets out fundamental principles for the agreement, both USS and Railpen warned they "discourage passive box-ticking and aim to take an informed and pragmatic approach to voting".
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