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January 9, 2008

Northern Rock shareholder revolt gains ally

by Gill Montia

Story link: Northern Rock shareholder revolt gains ally

RAB Capital and SRM Global, the hedge fund managers and Northern Rock shareholders, have secured an important ally in their campaign to give investors a greater say in the future of the mortgage bank.

AP2, the Swedish pension fund manager that also holds a significant stake in Northern Rock, has announced that it will vote in favour of the resolutions being tabled by RAB and SRM at an Emergency General Meeting on 15th January.

RAB and SRM jointly hold 18% of Northern Rock shares and AP2 is the bank’s sixth-largest shareholder with 1.8%.

The alliance therefore means that one-fifth of the bank’s shareholder base could vote against the board next Tuesday.

The emergency meeting is intended to be an opportunity for discontented Northern Rock shareholders to voice their opinions on the sale or possible nationalisation of the bank.

A key concern is that shareholders have so far failed to receive assurances from the bank’s board that their voting rights will be protected.

Chairman Bryan Sanderson is currently considering rescue proposals that involve rights issues and has stated that the board needs flexibility in deciding whether to issue shares or sell assets.

SRM has also written to the Treasury to set what it regards as a fair price for a forced nationalisation of the bank, of around 400p a share.

 

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