Astec three take Emerson to court

REUTERS - Three minority shareholders in the power conversion company Astec (BSR) are taking Emerson Electric, the 51 per cent US stakeholder, to court over its plan to oust Astec board members and buy out the minority stakes, a spokesman for the investors' groups said yesterday.

A statement from the minorities said a petition had been filed at the High Court on Wednesday night.

The shareholders, financial institutions Electra Fleming, Norwich Union and Equitable Life, last night presented a petition to the High Court under section 459 of the Companies Act, which deals with action perceived as being prejudicial to shareholders.

A source close to the minorities said a further four institutional shareholders - Royal & Sun Alliance, Clerical Medical, Credit Suisse Asset Management and the Church Commissioners, - plan to sign up to the court action. Together these seven shareholders represent 14.7 per cent of Astec shares.

The source said a total of 20 minority shareholders representing about 25 per cent of Astec stock have set up a "fighting fund" to share costs of any court action.

Emerson is offering the shareholders 111p per share for their holdings, arguing that it needs to buy out the minorities to address "commercial challenges" faced by Astec, particularly in Asia.

At an extraordinary shareholders meeting next Monday, Emerson plans to vote through its board changes. It has also said that it wants to block future dividend payments "for as long as it considers such payments to be contrary to the best interests of Astec and its shareholders".

The minorities and the independent Astec directors Emerson wants to oust say this offer is inadequate. Astec directors also argue that there is no need to suspend dividend payments.