Investors ‘unable to vote on BAE merger plans’

AN INVESTOR organisation has called on BAE Systems to address the “scandal” that will see the bulk of its shareholders unable to vote on its proposed merger with Airbus owner EADS.

The UK Shareholders’ Association (UKSA) said 86.5 per cent of BAE shares are held in nominee accounts, which means investors who hold shares in the defence giant through individual savings accounts and self-invested personal pensions are not the legal owners of the shares. As a result, they would not be entitled to vote if the deal was structured as a scheme of arrangement.

In a letter to BAE chairman Dick Olver, UKSA policy co-ordinator Eric Chalker said the situation was “no less than a scandal” and urged Olver to put pressure on nominee account providers to allow all investors to have their views heard.

Chalker added: “You are not responsible for the law which makes this so, but you are in a unique position to ensure that all BAE Systems’ investors are enfranchised for the purpose of this important decision.”

BAE owns dockyards at Govan, Rosyth and Scotstoun, while EADS has Airbus sites at Filton near Bristol and Broughton in Wales. The two companies have until Wednesday to confirm whether they will press ahead with the merger, which would create the world’s largest aerospace and defence group with a market value of about £30 billion.

The tie-up, which would need approval from the British, French and German governments, would see EADS hold 60 per cent and BAE 40 per cent of the merged entity.