Brandes vs Jardine battle could go to court

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The Independent Online

Brandes, the US fund manager, is considering taking the Jardine empire to court in its bitter attempts to unbundle the Hong Kong finance, property and distribution empire.

Brandes, the US fund manager, is considering taking the Jardine empire to court in its bitter attempts to unbundle the Hong Kong finance, property and distribution empire.

Jardine Matheson, the venerable trading company, which traces its roots back more than a century, last week relented and allowed Brandes to put four motions to the group's annual shareholder meeting, which is being held next month in Bermuda, where the Jardine companies are now registered.

The motions call for a restructuring of the Jardine empire, which is controlled though nine different companies and a series of cross holdings.

Brandes, which is based in San Diego, wants Jardine Matheson to bid for its sister company, Jardine Strategic, in a £1bn deal.

Matheson owns 74 per cent of Strategic, which in turn owns 50 per cent of Matheson.

Henry Keswick, the patrician chairman of the Jardine empire, initially tried to stop Brandes putting its motions to the meeting.

However, last week it relented, but said that Jardine Strategic would vote its 50 per cent stake in opposition to Brandes.

Brent Woods, the Brandes partner leading the battle against Jardine, is unhappy about the blocking tactics but is keen to continue the fight. "We are in for the long term," he said. "This is not over."

Brandes is looking at applying to the courts to have the Strategic votes ruled null and void, arguing that as the Strategic and Matheson board have six directors in common, they are related parties. The accounts for the Jardine companies support this. They point out that Strategic is run by Matheson which received a fee of $10.5m (£7.2m) for its management services.

The 2000 accounts also reveal that the board of Matheson received $18.9m in salary, bonuses, benefits and shares last year.

However, the accounts do not reveal how much each director received, although it is assumed that the money was mostly received by the seven executive directors. In the previous year the board shared $15.5m.

This is the second attempt in as little as 11 months by Brandes to restructure the Jardine empire.

Last year's battle ended when Jardine Matheson agreed to buy back more than $900m of shares.

Brandes was also instrumental in the revolt that forced the Anglo-American-backed consortium to increase its offer for De Beers, the diamond miner.

The consortium upped its offer by $2 a share to $45. Brandes and the other main rebel, Southeastern Asset Management of Memphis, Tennessee, is currently considering whether to accept the improved deal.

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