USS vows to change Dutch governance rules in parting shot at controversial Canon/Océ takeover

The £28 billion Universities Superannuation Scheme (USS), has fired its final parting shot in a fight against the governance terms of the takeover of Océ, the Dutch printing group, by Canon, by tendering its shares to the acquirer and vowing to corral Dutch investors to change Dutch law to protect minority investors. After selling its stake to Canon, Elizabeth Fernando, deputy chief investment officer of USS, said: “We will be working with other investors in the Dutch market to actively encourage changes to the Dutch takeover code to ensure minority interests are better protected in similar situations in the future and to ensure the Dutch market remains an attractive market for both companies & investors.”
The USS sell-off comes after the Enterprise Chamber of the Amsterdam Court of Appeals earlier this month rejected a request by USS and Hermes, the UK fund manager, to investigate what the investors called the “deteriorated position” of minority shareholders in relation to preference share voting rights under Canon’s €730m (US$998.4m) bid for Océ.The investors had requested the suspension of resolutions amending Océ’s corporate governance rules taken at an extraordinary general meeting on February 12. They also requested the suspension of preference share voting rights and the appointment of additional independent directors. Hermes Focus Asset Management, which was one of Océ’s largest shareholders, has also tendered its shares to Canon, saying it did not believe the price offered for Océ reflected its value.
Fernando added: “After careful consideration, USS has decided to tender its shares in Océ to Canon as part of its takeover bid. We were unable to satisfy ourselves that the current corporate governance arrangements would provide us with sufficient safeguards to protect the future value of our investment and therefore felt we had no option but to tender to the bid.” Following the ruling by the Amsterdam Enterprise Chamber, Canon declared its offer for Océ as unconditional, saying that it owned or had been tendered more than 71% of Océ shares.