A judge of the Ontario Superior Court of Justice's Commercial List recently approved a plan of arrangement that eliminated
the dual class share structure at Magna International Inc. («Magna») and... [more] Full article
Acted for a number of institutional shareholders before the OSC and the court in opposing Magna's proposal to eliminate
its dual class share structure.
Second, I was quick to recognize that this spinoff had all the makings of a classic Joel Greenblatt (meaning, attractive) spinoff; the parent's two businesses were in completely unrelated fields (Coal and small home kitchen equipment), it was somewhat complicated (family controlled,
dual class share structure) and it was a small enough transaction to be under the radar of most institutional and hedge funds.
Dover Motorsports maintained
a dual class share structure, which included common stock and Class A common stock.
As discussed in our prior post, SGX has sought input from stakeholders on possibly allowing issuers to adopt
dual class share («DCS») structures for newly listed issuers.
Those talks ended, however, for the same reason Bombardier always has trouble raising private capital — the company's
dual class share structure, which cements control firmly in the hands of descendants of company founder Joseph - Armand Bombardier.
But it also creates
a dual class share structure, which has given rise to a broader debate about legal protections for outside shareholders and the role that securities regulators should play in Canadian capital markets.
But it is important that investors, especially retail investors, understand the implications of investing in
a dual class share company and that regulators ensure that investors are protected.
It can be argued that mega-mutual fund advisors have been drawn into an alliance with the shareholder empowerment movement on the issues of proxy access and
dual class share structures created through IPOs like Snap Inc.'s, which resulted in a class of non-voting shares, simply because of the business opportunity such an alliance represents.
Ironically, there will then be a greater and greater need for
dual class share structures, even when they are not being used to protect the «idiosyncratic vision» of a company's founders.
Aritzia has used this argument to defend its proposed
dual class share structure, indicating that by maintaining control, the corporation will not be subject to a takeover bid and will be able to continue on its projected growth path.
Some Reflections on Magna and
Dual Class Share Structures Author: Professor Jeffrey G. MacIntosh, Toronto Stock Exchange Professor of Capital Markets, Faculty of Law, University of Toronto, June 17, 2011
The Council of Institutional Investors, an association representing funds and managers with over $ 3 trillion in assets under management, is «no fan of
dual class shares or entrenched founders.
The case is important as other companies with
dual class shares may contemplate similar collapses,» York University's Leblanc wrote.
Family that controls it has little over 25 % economic ownership but > 60 % of voting control via
dual class shares.
Not exact matches
Jamie Allen of the Asian Corporate Governance Association says the effort to get more big - ticket listings on Hong Kong's stock exchange by allowing
dual -
class shares has more cons than pros and could set a standard for other countries.
In November 2009, Facebook's board of directors voted to establish a
dual -
class stock structure, moving the existing shareholders stock from Class A to Class B shares, which carry 10 times the voting p
class stock structure, moving the existing shareholders stock from
Class A to Class B shares, which carry 10 times the voting p
Class A to
Class B shares, which carry 10 times the voting p
Class B
shares, which carry 10 times the voting power.
Among his biggest grievances are
dual -
class share structures.
Dual -
class shares and other regulatory changes are making Chinese technology firms look closer to home for listings, says Wilson Chow of PwC.
Now, Greenlight Capital is proposing a
dual share class structure they say will unlock between $ 13 billion and $ 38 billion in shareholder value.
Dual -
class share structures, which give controlling shareholders more than one vote per
share or designate some
shares as non-voting, are particularly unpopular among governance wonks and institutional investors.
Einhorn is now fighting back, saying GM misrepresented his
dual -
class shares proposal to the ratings agencies.
Stock market Stronach had little incentive to eliminate its
dual -
class share structure, which allowed him to control the company despite holding less than 1 % of its equity.
Although Bombardier hired Alain Bellemare as CEO in 2015, the company's
dual -
class share arrangement means control remains with the founding families.
«The
dual -
class share [structure] will be forced to collapse,» says Higgins.
When times are good,
dual -
class shares can promote long - term thinking, but Bombardier's case shows what can go wrong when bad management gets entrenched
The eight members of the Beaudoin - Bombardier family — heirs of Joseph - Armand Bombardier, who invented the snowmobile — control the company through a
dual -
class share structure that gives
class A
shares, 54 % of which are owned by the family members, 10 votes apiece.
Hong Kong is eyeing several tech listings in the coming two years, including those with
dual -
class share structure, from Chinese firms with a combined market cap of $ 500 billion.
When Facebook staged its initial public offering six years ago, it implemented a
dual -
class share structure that means Zuckerberg personally controls a majority of the voting stock even though other investors own the majority of the financial value of the company.
In Hong Kong, the
dual -
class share structure is available only for individuals.
Its founder at first wanted to list on the Hong Kong Stock Exchange, but that market doesn't allow
dual -
class shares, so Alibaba is coming to New York.
Xiaomi said it would have a weighted voting rights (WVR) structure, or
dual -
class shares.
Aside from Hong Kong, among the major exchanges only Singapore outright prohibits
dual -
class shares — and, like Hong Kong, it's considering relaxing that rule.
Dual classes give some shareholders more voting rights per
share than others.
As part of the listing, which could come as soon as June, Xiaomi will offer
dual -
class shares, which allow for weighted voting rights.
As long as stock exchanges allow
dual shareholder
classes, Google, Facebook and other Internet titans will probably never adopt a one -
share, one - vote system.
That shouldn't stop exchanges concerned about their reputations and corporate governance standards from leaning against the fashion — perhaps by limiting
dual classes to the first five years of public ownership, or capping nonvoting stock at, say, 25 percent of all
shares.
Martin Lipton, the corporate lawyer best known for helping managers stay in control with so - called poison pills, says
dual -
class shares ward off «myopic activists» — hedge - fund managers and buyout specialists who aim to drive up
share prices in the short term yet harm the company's long - term interests.
The decision by the Stock Exchange of Hong Kong to allow
dual -
class shares just one week ago has sparked fierce debate here.
Dual shares, often known as
Class A and
Class B stock, until recently were out of favor, but they are making a spectacular comeback, especially among technology companies.
It is expected to choose New York, where companies can use the
dual -
class share structure even if the founding shareholder is a company and not an individual.
To these critics, Hong Kong's decision to allow
dual -
class shares is further evidence of that erosion.
When a company such as Facebook goes public with a
dual -
class share structure, everyone whines about how shareholder - unfriendly it is.
In effect, the non-voting
shares are similar to the
dual -
class share structures that are more common among tech IPOs.
In other words, the returns of Facebook and Google may be exceptions rather than the rule when it comes to
dual -
class shares.
In particular, companies should be allowed to introduce
dual -
class shares after they have gone public, subject to a majority - of - minority shareholder vote.
Another good example of a
dual class transaction that fails to raise conflict of interest concerns is subsequent issuance of lesser - voting rights
shares.
He is also the author of several IGOPP policy papers, which offer new perspectives on a range of controversial issues including:
Dual -
class voting
shares, Corporate Citizenship, The place of women on boards of directors, Say - on - Pay by shareholders, The Gordian knot of executive compensation, The Troubling Case of Proxy Advisors, among others.
In this way,
dual -
class shares would deliver one unfulfilled promise of loyalty
shares, namely the temporary character of the departure from one -
share - one - vote.
Richard LeBlanc, associate professor of governance law and ethics at York University, on Bombardier's
dual -
class share structure.