Sugar threatens to dump shareholders: Amstrad chairman hints that he may pull out as his pounds 113m play for the company heads for failure
Sunday 06 December 1992
Mr Sugar hinted strongly that he might sell his remaining shares in the company and then leave if the bid fails. 'Up until now I have been acting in the best interests of my shareholders by making this bid, but if they turn me down, I become Numero Uno,' he said.
'I'll stay on but only to look after my own interests. I'll have to consider myself first in future. I'm not going to say what I mean by that. You'll have to draw your own conclusions.'
Early proxies ahead of next Thursday's meeting in the City to vote on the controversial buy-out proposal show shareholders overwhelmingly against. Although the number of votes filed by proxy are not yet sufficient to defeat the 30p-a-share bid outright, an adviser conceded: 'It looks bad for Mr Sugar.'
Of those who have filed proxies so far, 5,511 are against and only 3,932 for. The number of shares filed in favour of the bid, at 34.1 million, slightly outweigh those against, but to succeed, the proposal needs a 75 per cent majority in favour.
Mr Sugar deliberately released the early proxy figures to try to provoke those shareholders who are favourable into filing their votes. Advisers fear the proposal might be defeated out of apathy alone.
'There are 21,000 shareholders out there who are expecting a nice fat cheque from me,' Mr Sugar said. 'They're in for a big shock. If they want the money, they better start getting those pink and blue proxy forms in the post quick.'
Mr Sugar said 'the most hurtful part' of the controversy that has raged since he launched his bid 'is the suggestion that I am conning or cheating shareholders. I haven't got any ace up my sleeve. I'm sick and tired of debating this point.
'If shareholders don't want to believe me, see if I care. The proof will be in Friday morning's share price. Those shares are going to fall if my bid is rejected. There's nobody else who will offer as much as me,' he said.
Mr Sugar has assured Kleinwort Benson, Amstrad's financial advisers, that he will stay on at Amstrad if the bid fails. However, Kleinworts conceded that the assurance carried no legal obligation, and that in recommending the bid, the bank had taken into account the strong possibility that Mr Sugar would eventually leave if it failed.
Two institutional shareholders which together account for some 3 per cent of the shares - Postel and the Prudential - last week came out against the bid. Kleinworts said it had briefed both ahead of their decision, 'but clearly we didn't do a very good job'.
It is estimated that Mr Sugar might have incurred costs in excess of pounds 1m in making his bid, all of which he will be liable for personally if the offer fails. Besides the costs of advice and documentation, Mr Sugar would also have had to have paid substantial fees for the arrangement of banking facilities.
Mr Sugar's public relations firm, Michael Joyce Consultants, insisted that he would be staying on at Amstrad whatever the outcome of the bid. 'He's still got 200 million shares in Amstrad, so it is in his interests to make the company work. But it's deeper than that. He started this thing in 1968 and is totally committed. There's no significance in the fact that his service contract expired last June.'
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