Océ shareholders call for inquiry

Leading UK pension investors Hermes and Universities Superannuation Scheme have asked the Dutch Enterprise Chamber to intervene in the Canon-Océ takeover deal. The funds, which collectively own 5.1% of the company have called for an investigation into the negotiations between Canon and Océ about the tender offer for Océ shares and subsequent events. As part of their request, the shareholders have asked for the suspension of a number of resolutions carried at the Extraordinary General Meeting on 12 February 2010.

In a statement today, USS and Hermes have asked that the court consider the “deteriorated position of minority shareholders following the recently changed corporate governance of Oce, which will take effect once Canon declares its offer unconditional.”

In November 2009 Canon offered to buy Océ for about €730 million euros; two weeks ago it announced that it may settle for less than the 85% stake originally sought, thereby limiting the ability of dissenting shareholders to force a higher price.

At the February EGM, Océ shareholders voted to amend the company’s articles of association and ratify the appointment of Canon executives Toshizo Tanaka, Seymour Liebman and Norman Eley to the supervisory board following completion of the deal. According to the funds, the appointments would “dramatically” diminish the independent representation of the supervisory board, and the revised articles of association would offer Canon 19% “free votes” on Oce’s preferential shares, “disproportionate to their economic value.”

The Enterprise Chamber of the Amsterdam Appeals Court will hear the case on March 3. Meanwhile, Orbis Portfolio Management Europe publicly announced that it would not tender its 10% holding and Danish fund Sparinvest, which owns 5.5% of Océ’s shares, has said the offer did not “reflect the full value” of Océ.

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