Beaten Lucas pledges a fresh fight

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The Independent Online
LUCASVARITY pledged to make another attempt to move its domicile to the United States just two days after suffering an embarrassing defeat at the hands of shareholders who blocked the move.

The car parts giant is expected to try again next year, although it said it might not pursue exactly the same path. The company is unhappy about the rules enshrined in the Companies Act which require firms to win a 75 per cent majority of shareholders if a company is to move its domicile and primary listing to another country. It is thought LucasVarity might begin a lobbying campaign to have the rules changed.

The company was unhappy that even though it received the backing of 74.2 per cent of its shareholders from an 80 per cent turnout, it still failed to win the day.

The defeat has increased the pressure on Victor Rice, LucasVarity's chief executive who championed the move. However, the company yesterday insisted that it was not aware of any growing opinion that Mr Rice should step down. "There will be no resignations at this end," the company said yesterday. "Institutions like the way the company is being run."

This view appeared to be borne out yesterday by one leading institutional investor in LucasVarity, which said: "We do not want blood."

The company is keen to dispel the view that it was Mr Rice personally who pushed the board to agree to back the attempted move to America. It said the decision had the full backing of the board, including Ed Wallis, the chairman, who is also head of Powergen, the electricity generator. "It was a unanimous decision, not just Victor Rice's," a spokesman said.

The company declined to disclose the cost to shareholders of the failed exercise.

Mr Rice has argued that a move to the US would boost LucasVarity's share price as the business is better understood there, and enable it to raise cheaper capital for acquisitions. However, critics said Mr Rice was keen on securing a more lucrative, US-style remuneration package. Mr Rice is understood to prefer the American way of life and spends much of his time in Buffalo, New York.

UK institutions were also wary about losing shares in a FTSE 100-quoted company and receiving American depositary receipts instead.

Shares in LucasVarity have not yet had the chance to react to the news of the vote result, which did not emerge until Saturday midday. On Friday they closed 1.5p down at 208.5p compared to their 284.5p April peak.

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