THE UK shareholder trade body has urged both the chairman of BAE Systems and the UK Takeover Panel to allow indirect shareholders in the defence group to vote on the proposed merger with EADS.
In a letter to the UK Takeover Panel, the UK Shareholders’ Association (UKSA) asked it to let shareholders holding an indirect stake in BAE to vote on the £56bn tie-up. According to BAE, 86.5 per cent of its shares are held indirectly, which means the investors do not have legal ownership of the shares.
The UKSA stressed it had no opinion on the merits of the merger but said the decision not to let the majority of private investors have a say in the tie-up was “scandalous” and “unjust”.
The UKSA points out that as the nominee shareholders hold the majority of the equity, it will be “far easier” for BAE to obtain the 75 per cent voting majority it needs to approve the new company.
Eric Chalker, policy co-ordinator of the UKSA, said in a letter to BAE chairman Dick Olver: “It cannot be right for the merger to be decided by those holding a minority of the shares, nor for nominee account providers, having no beneficial interest in the outcome, to cast votes except on their clients’ instructions.”