Sign in Subscribe
Aerospace industry

British Aerospace Shareholders Defy Directors, Oppose Rover Sale to BMW

Strategic Insights

— 1 min read

Yesterday's extraordinary meeting at British Aerospace witnessed a highly charged and defiant show of hands vote, with 111 shareholders opposing the proposed £800 million sale of Rover to BMW, while only 42 were in favour. This comes as a surprise, as directors had already disclosed that they had secured overwhelming support for the deal. However, the final tally revealed that 119.6 million shares voted in favour and 2.9 million against the sale. The meeting also witnessed angry exchanges in the Commons, with John Major accusing Labour MP Andrew Miller of having 'centralising' tendencies.

Key Takeaways:

  • 111 shareholders voted against the sale of Rover to BMW, while only 42 were in favour.
  • The deal still received overwhelming support from big City institutions voting by proxy, with 119.6 million shares in favour and 2.9 million against.
  • Directors had secured overwhelming backing for the deal before the meeting, despite failing to win the support of banks for a management buy-out.
  • The European Commission has given clearance for the deal, which provides for BMW to take on £900 million of Rover's debts.
  • Rover's debts are expected to peak at £2.7 billion during the year but average just over half that amount on a day-to-day basis.
  • The City is not prepared to provide financing for Rover's needs, leading to the sale to BMW.
  • Richard Lapthorne, finance director, stated that no bank would loan £2.7 billion to a company.
  • The board faced repeated charges that it had acted against the interests of British manufacturing and shareholders.
  • Directors were told that their decision to accept the BMW offer rather than develop Rover's 15-year partnership with Honda could inflict severe damage to Anglo-Japanese ties.
  • Rover's chairman, George Simpson, admitted that Honda had been hurt by the BMW transaction and associated it with a negative impact on Japanese trading.

Statistics:

  • 111 shareholders voted against the sale of Rover to BMW.
  • 42 shareholders voted in favour of the sale.
  • 119.6 million shares voted in favour of the sale, while 2.9 million voted against.
  • Rover's debts are expected to peak at £2.7 billion during the year.
  • Rover's average daily debts are just over half of the peak amount.

Sources:

  • "British Aerospace Shareholders Defy Directors, Oppose Rover Sale" (The Guardian)
  • "Rover's Sale to BMW to Go Ahead Despite Shareholder Opposition" (The Times)

Read more