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Shareholders reject proposal to break up Greycoat's assets

Shareholders in Greycoat yesterday rejected a resolution calling for the sale of all the embattled property company's assets.

The break-up proposal, which had been put forward by UK Active Value, a fund which speaks for 10.6 per cent of Greycoat, was defeated by 68.4 million votes to 3.6 million.

"This result shows an overwhelming majority against UKAV's proposal," said Michael Beckett, Greycoat's chairman. "We can now get back to work without this costly distraction."

Mr Beckett claimed "95 per cent support for our management and its strategy", even though shareholders owning 54.8 per cent of Greycoat's equity voted against the resolution, with 2.9 per cent in favour.

UKAV did not vote on the proposal and Brian Myerson, who runs the fund, did not attend the meeting.

Mr Myerson had already indicated he would abstain in the vote after reaching a deal with Greycoat's management to sell one of its trophy properties, Embankment Place in central London. Greycoat claims the sale of the building has been planned for many months.

Before the vote Mr Beckett revealed that cost of holding the EGM and its adjournment was about pounds 300,000, equivalent to a 20 per cent increase in the dividend. "Even more significantly it has been an enormous and costly diversion of management time and effort," he said.

Despite yesterday's vote, Greycoat's future remains uncertain. Last month Moorfield Estates, a rival property group about a quarter of Greycoat's size by market capitalisation, tabled proposals for a pounds 214m takeover bid, which Greycoat is resisting.

Moorfield wants to demerge two of Greycoat's biggest investment properties - Embankment Place and 123 Buckingham Palace Road, also in central London - into a company with a separate listing.

Last month Greycoat rejected outline proposals sent by Moorfield.