Funds resist Reuter scheme

Press, 30 January 1984, Page 21

Funds resist Reuter scheme

NZPA-AAP London Britain’s pension funds and institutional investors are “fundamentally opposed” to the current scheme for floating the international news agency, Reuter, according to a report in the “Guardian,” of London. The organisations are reported to onject to the section of the proposal that creates “a special, favoured set” of voting shares in the agency for the current newspaper owners. The newspaper says the organisations will not be prepared to buy shares in the agency unless the plan is changed. London financial circles propose that the independence of Reuter be guaranteed by a “golden share” under the control of a neutral board of trustees. The golden “founder” shareholding could be used only in exceptional, clearlydefined circumstances, such as blocking a take-over bid or defending the integrity of the foreign news reporting services from bias. The “guardian" says opposition is being mounted by the National Association of Pension Funds and the British Insurance Association, whose investment advisers have been asked to comment on the flotation scheme. The chairman of the National Association of Pension Funds, Mr Geoffrey Musson, said: “There is a well known antipathy within the pension funds to multiply voting shares of this nature. “We have to think not only of the glowing circumstances of a company today, but what happens in 10 to 15 years. The poor institutional investors could be left with no power at all.” The “Guardian” says that unless the Reuter’s board has the full backing of Britain’s investing institutions it will take a risk in offering the shares in May as planned. The newspaper adds that, depending on the state of the market, Reuter’s owners want to offer up to £5OO million (SNZII9OM) worth of shares, and because of the size of the float they will offer the shares for sale in London and New York. One institutional fund manager said: “If they go ahead and only offer shares with partial voting rights then there will have to be a significant price discount.”