British Land rejects call for share buy-back

British Land refused to bow to shareholder demands to buy back shares yesterday but the property company offered a small concession to rebel investors by shortening the contract of the chairman's son, Nick Ritblat.

Laxey Partners is leading a shareholder revolt and the property giant faces a series of special resolutions at its annual general meeting in July, two of which ask for share buybacks.

A third resolution amounts to a vote of no confidence in the management. British Land has long been charged with poor standards of corporate governance.

Reporting full-year results, the company revealed that Mr Ritblat, an executive director and the son of chairman and chief executive, John Ritblat, "voluntarily agreed to reduce the period of his contract without compensation to one year [from two]". The move follows a series of meetings between Nick and institutional investors.

However, the shortening of Nick's contract is not enough to placate investors, according to analysts. British Land said it would issue a detailed response to Laxey's proposals by 17 June. It is thought that the investor may lodge more resolutions before the AGM.

John Ritblat, 66, said his son's employment contract was shortened in order to comply with good practice in corporate governance. However, the elder Mr Ritblat insisted his holding of the positions of chairman and chief executive together was in line with good governance.

"I will continue to combine the roles as long as I am here," said John Ritblat. "It is perfectly proper corporate governance. We have a small staff and there is a limit to the number of generals we need."

Although British Land did not formally rule out buying back shares yesterday – something it has opposed in the past – the group made clear that circumstances that would justify this were not present. The company went further, saying that property was now enjoying a boom and that company funds were needed to take advantage of this opportunity. "I cannot recall a time since the exuberance of the late 80s when there was greater enthusiasm for investing in property," said John Ritblat.

British Land reported a 3.9 per cent uplift in the net asset value of its portfolio to 833p a share, for the year ended 31 March. The estate is now worth £9.3bn. The company's City offices, which saw an appreciation in value of 19.7 per cent the previous year, declined by 2.2 per cent this time. Retail property was unchanged or improved. The group's two big assets are Broadgate, the City office complex, and Meadowhall, a Sheffield shopping centre.