FRANCE - Activist fund manager Knight Vinke is targeting pension funds as part of a lobbying programme to increase the offer price for French energy giant Suez if it is merged with Gaz de France.
In an open letter to the French Prime Minister Dominique de Villepin, Knight Vinke’s head Eric Knight called for the sale of some of Suez’s non-core financial assets in order to help fund a higher shareholder price. The letter was placed in publications across Europe.
The French government is the key driving force in the proposed merger as it seeks to create a ‘national champion’ in the sector.
The asset manager has employed MacKenzie Partners to sound out institutional shareholders on their opinions on the merger plans as they currently stand.
According to the letter the current proposal only values Suez shares at e30.7, while Knight Vinke believe shareholders could expect at least around e40 per share.
Martin Forest, director of communications at Knight Vinke Asset Management, said: “We are keen to generate value for shareholders, which we believe the current proposals do not give. We believe pension fund shareholders could play an important role in helping us to achieve this.”
In the letter Erik Knight warned that Suez shareholders’ opinions were vital. He said: “The transaction requires the approval of two thirds or more of the Suez shareholders at a shareholders’ meeting due to take place at year end and can be blocked, therefore, by shareholders representing at least one third of the shares represented.”
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Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point