Rice ‘to quit’ if US vote is lost

LucasVarity’s efforts to de-list from the London Stock Exchange and move to New York continued last week amid mounting uncertainty as to how leading institutional shareholders will vote. The outcome will be decided following an EGM today. The company’s proposed change of domicile has now turned into a vote of confidence in the management, with […]

LucasVarity’s efforts to de-list from the London Stock Exchange and move to New York continued last week amid mounting uncertainty as to how leading institutional shareholders will vote.

The outcome will be decided following an EGM today.

The company’s proposed change of domicile has now turned into a vote of confidence in the management, with analysts predicting the departure of chief executive Victor Rice should the vote not go his way.

He needs 75% of shareholders to approve the move as well as more than half of all votes, regardless of the size of stakes held.

But last week it became clear that at least three institutions Schroder Investment Management, Legal & General and Mercury Asset Management are unhappy with the proposed move.

Legal & General holds just under 2.5% of the shares. Vanessa James, director of UK equities with the firm, said: ‘We shall vote against the LucasVarity recommendation. We were not convinced about their reasons.

‘They maintain that it is easier to raise capital in the US. The dividends they pay in the US are not as big, but companies buy shares back and the same costs come out.’

A Schroder spokesman said: ‘We believe that our clients would be disadvantaged by a move to the US.

‘The advantages proposed by the company are rather tenuous and therefore we advise that our clients should vote against the recommendations.’

Rice said the company would be able to buy back more shares in the US, increase its equity and raise loans to help with acquisitions more easily and more cheaply than in the UK.