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D-Day for LucasVarity
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November 6, 1998: 7:31 a.m. ET
Shareholders meet to vote on move from London to New York
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LONDON (CNNfn) - The fate of car and aerospace components manufacturer LucasVarity hung in the balance Friday, as shareholders of the British-based firm prepared to vote on a proposal to move its listing to the U.S.
Analysts say the outcome is too close to call, given voting rules that give small shareholders the same power as institutions.
The company needs to jump two hurdles to win shareholder backing for the plan. A majority by number and by value have to give their approval.
U.S. investors are thought to have increased their shareholding from 47 percent to 60 percent since the move was proposed, and LucasVarity's board is expected to win on the requirement that requires approval from 75 percent of shareholders by value.
But the outcome of the majority vote is less clear. U.S. investors are believed to amount to just 4,500 of the 22,000 shareholders. A simple majority of investors at the extraordinary meeting is needed.
LucasVarity chief executive Victor Rice said the move will place the company among its industry peers and allow better access to capital. It will also better position the firm to take advantage of acquisition opportunities.
U.S accounting rules, meanwhile, would allow the company to execute its proposed 20 percent share repurchase program. U.K. accounting and tax rules limit repurchases at LucasVarity to 3-4 percent a year.
Critics say the aim of the move is to bump up executive remuneration packages to U.S. levels.
The extraordinary general meeting starts Friday afternoon, with the result due by early evening.
In London LucasVarity shares were trading at 197 pence, down more than 6 percent.
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LucasVarity
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