Normally companies need a 25 per cent free float of their shares in order to protect minority shareholders from the interests of larger controlling shareholders. However, the UK listing authorities can and do grant waivers. Under the rules, the listing authorities can modify their stance to accept a percentage lower than 25 per cent if they consider the market will operate properly with a lower percentage, in view of the large number of shares and the extent of their distribution to the public.
The size of the free float at Polyus became a controversial issue yesterday as UK institutional shareholder F&C Investments called on the London authorities not to grant the company a premium listing given the size of its free float.
George Dallas, director of corporate governance at F&C, told City A.M. yesterday: “The question is, is there a critical mass of independent shareholders to represent a robust minority view? Our concern is that a premium listing is a means towards index inclusion. If that’s done by cutting corners then we have a concern.”
Polyus, which is being advised by JP Morgan and Bank of America Merrill Lynch, is understood to have had strong indications of support for the deal.
Institutional shareholders like F&C have become cautious about the inclusion in the FTSE100 index of companies controlled by offshore large shareholders after the experience of ENRC which earlier this year ousted non executive directors after a boardroom battle.