Shareholders in glass-maker Ardagh voted overwhelmingly yesterday to take private the company's international glass-making operations. At a lively extraordinary general meeting, 92 per cent of those voting approved a motion to hive off the listed company's assets in Britain and Italy to a company incorporated in Guernsey.
The vote came after Ardagh chairman Mr Paul Coulson announced a number of concessions to shareholders. They include the appointment of a director independent of both the glass company management and of Yeoman, which will be the dominant shareholder in the new company. The company will also buy back up to 5 per cent of the outstanding shares each year for the next three years at a set price - €1.50 at the end of the first year, rising by 12.5 cents a year thereafter. Mr Coulson's statement said Yeoman would not be selling shares in the buybacks.
Shareholder Mr Charles Lysaght asked why, if the issues now being outlined were desirable, they had not been included before Mr Sean Quinn came in with a rival offer for the businesses being demerged.
"You have altered the basis on which the proposal is being put to us," he said, calling for the meeting to be adjourned.
He was supported by Mr Denis O'Callaghan, who said: "You are asking us not to vote on the document circulated to shareholders detailing the terms of the demerger but on a press release, which is quite wrong."
The board was also attacked over the requirement on shareholders to assert their intention to take up their shares in the private company. People not returning a "retention notice" to the registrars within a three-week period of their being sent out will find themselves locked out of the new company. They would receive only the €1.10 cash alternative which has been disparaged by the company itself as not reflecting true value.
Mr Tom Cunningham said the move was contrary to normal practice where shareholders would actively choose the cash alternative. "I believe there is design behind this. Shareholders, through inertia, will lose out."
Mr Coulson defended the move saying the company opted for the cash by default option as it wanted shareholders to make a positive statement about the demerged company. "We want people to say 'we want to be included'," he said.
Mr Coulson also reassured shareholders that moves to place restrictions on the transfer of shares were designed solely to prevent a rival firm buying a stake in Ardagh Glass to disrupt the company. In his statement, Mr Coulson said the company would seek to facilitate a market for the shares in the private company on a "matched bargain" basis.
In a poll vote, 26.2 million shares were voted for the demerger - just over 75 per cent of the ordinary shares in issue but almost 92 per cent of those voted - and almost 2.3 million against.There was surprise that more than six million shares were not voted.
Motions approving the funding of the deal, capping the voting rights of large shareholders on the election of directors and amending the share option scheme to allow the grant of up to 10 per cent of the shares in issue were passed with little dissent by the meeting.
Speaking after the vote, chief executive Mr Eddie Kilty accepted that controversy over the terms of the deal in recent weeks had led to some of the amendments to the plan announced at the meeting yesterday.
In particular, he said the issue of providing an exit mechanism to shareholders in the short term had not initially occurred to the company. He said the company would exercise its option to acquire the German Hermann Heye business from Yeoman and, in the short term, would concentrate on integrating it with existing operations.
