Shareholders in CRESTCo and Euroclear – who are often the same people – have confirmed their support for the takeover of CRESTCo by Euroclear.
The acquisition was approved by CRESTCo shareholders at a meeting convened by the UK High Court and held on 16 August 2002. CRESTCo shareholders also voted in favour of the resolution to approve and implement the scheme of arrangement by which the acquisition is being made at the subsequent Extraordinary General Meeting (EGM).
The scheme of arrangement, to be effective, must also be sanctioned by the High Court, where a Hearing has been scheduled for 19 September.
Surprisingly, in view of the importance of this transaction to a key piece of local market infrastructure, 5 percent of CREST shareholders could not even be bothered to vote: 95 per cent of CRESTCo shareholders, representing 98.75 per cent of the shares, supported the Board-recommended takeover.
Euroclear Bank shareholders, at their Extraordinary General Meeting held on 14 August, and Euroclear plc shareholders, at their Extraordinary General Meeting held on 16 August, have also approved the requisite changes in the companies’ Articles of Association to bring into effect the elaborate corporate governance arrangements on which the long term success of the acquisition depends. The changes provide for the appointment of independent directors, a deputy chairman, and new Board and market user committees, all of which are designed to deal with the conflicts of interest inherent to the amalgamation of a CSD which all market participants are obliged to use with a commercial provider such as Euroclear Bank.
Chris Tupker, the Chairman of Euroclear plc and Euroclear Bank, said: “We are delighted with the strong vote of confidence and support from our shareholders, which serve to reinforce our conviction that the merger and new business model we have proposed is in line with our clients’ needs. Our commitment to strong user governance underpins our plans to reduce cross-border transaction costs to the level of domestic transactions.”
Sir Nigel Wicks, the Chairman of CRESTCo and the future Deputy Euroclear Chairman, added: “Shareholders have shown overwhelming support for this merger. We will now move to integrate the two companies quickly and effectively in order to be able to deliver to all our customers the benefits of a single domestic market for Europe.”
Completion of the acquisition of CRESTCo is still subject to approval by the Office of Fair Trading in the UK , which has the power to refer it to the UK Competition Commission.