U.K. insurer Esure Group PLC defended a resolution voted on at its annual general meeting May 18 after almost 30% of shareholder votes received on the resolution were against it.
The resolution seeks shareholder approval of a waiver to Rule 9 of the U.K. Takeover Code that the company has obtained. In Esure's case, the rule stipulates that as long as Chairman Peter Wood "and any person acting in concert with him" hold 30% or more of the voting rights in Esure, they would have to make a general offer to buy all the company's shares if it conducted a share buyback.
Some 29.19% of the votes received were against approving the waiver; votes cast on the question amounted to 42.86%, compared to the roughly 74% voted on most other questions, because Wood and any concerted parties were unable to vote on the measure.
Esure said in a stock exchange announcement that its ability to choose the best capital returns policy for shareholders and maximize shareholder value would be "limited" without the resolution's approval, because if it decided to do a share buyback, it would need to apply for the waiver at that time, which would involve calling a general meeting. Esure said: "By having the waiver approved now, it simply keeps the options open for the company."
The company added that "it is normal practice to include a Rule 9 waiver resolution in these circumstances," although it also said it respected the values and views of shareholders and "will assess the feedback it has received to inform future consultations."
Despite shareholders' objections, the Rule 9 waiver resolution passed, along with the rest of the resolutions. Some 98.34% of votes cast were in favor of authorizing Esure to buy back shares.