Two of the biggest minority investors, Royal & Sun Alliance and Electra Fleming, revealed yesterday that they were supported in the unprecedented legal move against Emerson Electric by four other named institutions, Equitable Life, Clerical Medical, British Steel Pension Fund and Credit Suisse. The six institutions together own 13 per cent of Astec shares.
They said another six institutions, speaking for a further 6.7 per cent of Astec, were privately supporting the court action and have agreed to share the legal costs.
The row erupted last month after Emerson, which owns 51.1 per cent of Astec, said it wanted to buy out other investors at the then market price of 111p a share. The US electronics group also said it would replace three Astec executive directors with its own appointees and stop paying dividends.
Emerson called an extraordinary shareholders meeting (EGM) for 9 March to approve the plans and last night showed no sign of calling off the vote, despite the scale of discontent by institutional investors. An Emerson spokesman declined to comment on the legal move.
The 12 institutions will argue that Emerson has breached the 1985 Companies Act by unfairly prejudicing the rights of minority investors. They hope the judge will refer the dispute to a full hearing later this year.
Astec traces its routes back to BSR, the company which became a household name in the 1970s with a record player which automatically changed discs.
The group has since shifted into the market for power supply equipment for computers, with most factories based in the Far East.Reuse content