The week in investor relations: Hong Kong drops LSE bid, climate proposals fall by half and Renault fires CEO
– The Stock Exchange of Hong Kong has dropped its £32 bn ($40 bn) bid for the London Stock Exchange (LSE), reports the Guardian. The Asian bourse said it had been ‘unable to engage’ with the LSE’s management on the deal. The LSE rejected the initial bid four weeks ago, saying it would be a ‘significant backward step’ and had ‘fundamental flaws’. With the takeover attempt over, the LSE is free to continue with its deal to buy financial data provider Refinitiv for £27 bn.
– The number of shareholder proposals on climate change that reached a vote fell by more than half over the last year, according to the Financial Times (paywall). The story, citing data from Georgeson, reports that only 13 proposals came to a vote at S&P 1500 companies in the year ending June 30, 2019, a fall from 29 in the preceding 12 months. The fall could signal that investors are not determined to tackle climate change, although it could also be a sign of more negotiations between companies and investors. US regulators have also made it harder for some environmental proposals to reach a vote.
– Renault has dismissed its CEO Thierry Bolloré and installed finance chief Clotilde Delbos in his place while a permanent successor is found, reports the BBC. The move comes after Nissan, which works closely with Renault, brought in a new CEO earlier this week. The move may be designed to improve relations between the two companies, but bad results may also be a factor, the BBC notes. Bolloré has referred to the move against him as a ‘strong-arm coup’ and said he only became aware of plans to oust him on Wednesday this week, adds the article.
– A new hedge fund in Japan will go long on companies with good governance and short companies perceived as being at high risk of scandal, according to an article published by The Japan Times. The hedge fund will be run by Zuhair Khan, who was recently head of research at Jefferies Japan, and launched by private bank Union Bancaire Privée. ‘Valuations in Japan are very low as future improvements in governance are not priced in, and this creates tremendous upside,’ says Khan in the article. ‘A few years ago, it may not have been possible to have a fund like this.’
– The UK’s Financial Reporting Council has released a report criticizing the way British companies are disclosing certain financial information, reports the Wall Street Journal (paywall). The body, which regulates auditors and accountants and sets the UK’s corporate governance code, analyzed ‘the application of new rules governing the accounting of revenue recognition and financial instruments as well as of an existing rule on the impairment of non-financial assets’, concluding that there is ‘considerable scope for companies to improve,’ notes the article.