Foreign shareholders flock to Elisa extraordinary shareholders´ meeting

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A record number of foreign shareholders are attending the extraordinary shareholders' meeting of the telecommunications service provider Elisa today, Monday. Domestic investors are also more active than usual.
     Foreign owners hold 37 per cent of Elisa, and about 50 per cent of the foreign-owned shares - 15 per cent of all voting shares - are represented at the meeting.
     "There are about 370 different investors. This is approaching a Finnish record", says Risto Multa investment director of the pension insurance company Varma.
     Varma and four other leading Finnish pension insurers joined forces in late December to oppose proposals by the Icelandic company Novator for changes in Elisa's articles of association and a reshuffle on its Board of Directors.
     
The pension companies have also collected proxies from Finnish owners, and lobbied foreign investors.
     The lobbying effort has been successful, because many individuals and organisations that are usually passive in matters of ownership policy, have decided to attend the meeting and vote. Attending the meeting will be a large number of Finnish investment funds, pension investors, and insurance companies, who all have small holdings of Elisa stock. These add up to a significant proportion of the company's ownership, and nearly all of them are believed to support Elisa's present Board of Directors.
     Institutional Shareholder Services, a company which advises institutional investors, has also come out in favour of the Elisa status quo, and opposes the proposals of Novator. An ISS report rejects Novator's proposals and its operating methods in very clear language.
     Institutional investors tend to follow the advice of ISS
     
The vote at the shareholders' meeting is expected to be very exciting in any case. In addition to its holding of 14.88 per cent of Elisa's shares, Novator is believed to have the 1.25 per cent holding of the company Ajanta behind it, amounting to more than 16 per cent. In addition it is believed to have a degree of support among foreign shareholders.
     Elisa's Board can count on the support of the 8.4 per cent of shares held by pension companies, as well as more than one per cent from small investors, the Nordea and OP Bank funds, as well as the Finnish state. This amounts to 10.5 per cent. In addition, a large variety of other Finnish investors are set to support the Board.
     The financial daily Kauppalehti says that foreign owners representing at least at least seven per cent of the votes at the meeting are on the side of the Elisa Board of Directors.
     To push through the changes that it wants on the Board, Novator would need half of the votes that are cast.
     
Another exciting factor is whether or not there will also be a vote on changing the articles of association. Novator withdrew the proposal to this effect recently, apparently concluding that it did not have the necessary two thirds majority behind it.
     However, the item is still on the agenda, and a vote is possible, if a shareholder requires it. After a defeat on the matter, it would be more difficult for Novator to re-introduce the item at subsequent shareholders' meetings.


Previously in HS International Edition:
  Director of Novator Finland amazed at Elisa Board´s course of action (11.1.2008)
  Icelanders offer compromise in initiative on Elisa changes (10.1.2008)
  Icelandic investor attributes Elisa uproar to "nationalism" (7.1.2008)
  Large Finnish pension insurers are suspicious of Novator´s intentions for Elisa (14.12.2007)
  Elisa Board Member expresses disapproval of policy chosen on corporate restructuring (13.12.2007)

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