In a signed statement ,18 institutions, representing roughly 25 per cent of Astec's shares, said they "protested vigorously at the tactics currently employed by Emerson in its attempt to wrest control from Astec's independent board". They also viewed with "particular concern" Emerson's threat to halt dividend payments by Astec.
The statement was supported by leading City fund managers including Clerical Medical, Electra Fleming, Legal & General, Norwich Union and Royal & SunAlliance.
The statement continued: "If allowed, we consider that this blatant disregard of our wishes as minority shareholders is likely to reduce the level of institutional investor support for companies that have a single dominant shareholder."
Two weeks ago Emerson, which owns 51.1 per cent of Astec, made an approach to Astec's independent directors, offering to buy out the remaining shares at the prevailing market price of 111p. At the same time, Emerson announced its intention to remove three of Astec's executive directors from the board and replace them with Emerson appointees, while also voting to stop Astec's dividend payments.
However, Astec's independent directors rejected the offer as "wholly inadequate". Yesterday Peter Marshall, Astec's leading independent director, said Emerson's proposal was "outrageous, inept and arrogant".
But a spokesman for Emerson said: "We are behaving in an absolutely proper way given that we are the controlling shareholder."
Astec's shares shares closed up 0.5p at 121.5p.Reuse content