Minority shareholders in Astec (BSR) Plc, the power conversion products group, were brushed aside on Monday as three of the company’s independent directors were thrown off the board by the now majority stakeholder, Emerson Electric Co of the US, to be replaced by three of Emerson’s own nominees. Emerson, the Missouri-based electronics group, now owns 51.1% of Astec’s shares, and is continuing to use strong arm tactics to push through an 111 pence a share offer for the remaining 49% of shares it does not own. An offer which many feel is wholly inadequate. But the howls of protest from Astec’s shareholders went unheard at the extraordinary general meeting, and Emerson used its 51% holding to steamroller the opposition without even deigning to send an executive to attend in person. None of the new directors which Emerson has appointed could muster the energy to appear either. This show of contempt has utterly incensed UK shareholders, and the whole matter is now being referred to the UK courts on April 2nd in a test case for the rights of minority shareholders. Minorities are supposed to be protected by statute from the prejudicial acts of an aggressive majority under the UK’s Companies Act (1985). Emerson has threatened to withhold dividends if its offer is not accepted, which is exactly the sort of behavior the Companies Act legislation was intended to prevent. Astec, which has headquarters in California, Hong Kong and the UK, and which turns over $600m a year, has now lost its finance director, Michael Arrowsmith, its chief operating officer, Michael Smith and one of its co-founders, Neal Stewart.
