Rice tipped to fight on for US domicile

LucasVarity chief executive Victor Rice may make a second bid to win shareholders over to his plan to relocate the business in the US. Rice’s plans to change the company’s domicile by delisting from The London Stock Exchange and relisting in New York narrowly failed to win the required 75% majority, winning approval from investors […]

LucasVarity chief executive Victor Rice may make a second bid to win shareholders over to his plan to relocate the business in the US.

Rice’s plans to change the company’s domicile by delisting from The London Stock Exchange and relisting in New York narrowly failed to win the required 75% majority, winning approval from investors accounting for 73.9% of the shares.

But some City analysts believe it is only a matter of time before Rice re-submits his plans to shareholders.

Last time, the proposal was opposed by several major UK institutional investors, including Schroders and Legal & General. Among the smaller shareholders who lined up against the move was Sir Anthony Gill, former chief executive of Lucas Industries.

Sir Anthony said he hoped that Rice would now spend some time getting his message across to the UK investment community which had, he claimed, been very badly looked after by the company.

He added: ‘I hope that now this proposal has been defeated we can put it behind us and move forward. I hope that we won’t see this proposal come up again next year.’

Analysts were initially vocal in calling for Rice’s resignation, but as the week wore on it became obvious that the institutions broadly supported his continued role at LucasVarity.

David Manning, head of UK equities at Foreign & Colonial Investment Management, said: ‘I don’t think management needs to change anything. They need to take note of the vote and carry on. The last several weeks have been an unwelcome distraction.’

Another major institutional investor said: ‘We have not made this an issue of confidence. We want them to pursue policies for shareholder value. We’ll be having discussions with them.’

The company insisted that there would be no management changes. A spokesman said: ‘This proposal was neither a vote of confidence in management nor was it a decision that was going to affect the UK operations of LucasVarity.

‘It was designed to access a new pool of funds to enable it to grow and expand.’