Tesco - EGM 11 February 2021
Item 1: Special dividend
On 18 December 2020, Tesco completed the disposal of its Asia Business for a net consideration of £7.8 billion. Out of this consideration, the Board spent £2.5 billion to patch-up the group’s significant pension deficit. The balance of approximately £5bn is proposed to return to shareholders by way of a special dividend.
Tesco operates with high payouts and financial leverage which we do not consider sustainable. ECGS would prefer that the group reduces its debt before any shareholder distribution. However, in light of the expected improvement of results for FY2020/21 and Tesco’s lack of new growth opportunities for investments, we recommend that shareholders approve the special dividend.
Item 2: Share consolidation
To maintain share price comparability, so far as possible, before and after the special dividend, the Board proposes to consolidate ordinary shares based on the following ratio: 15 new ordinary shares for 19 ordinary shares held. Resolution 2 is conditional on
Resolution 1 being passed.
Tesco called this EGM only 17 days before the meeting, however, the intention to pay the special dividend was announced in December 2020. We condemn this abusive use the meeting short notice without any emergency.
Tesco is a retailer. Co. and its subsidiaries are engaged in retailing and associated activities in the U.K. and Republic of Ireland; and Czech Republic, Hungary, Poland, Slovakia, Malaysia, and Thailand. Co. provides retail banking and insurance services through Tesco Bank in the U.K. Co. sells and services of motor and home insurance policies underwritten by Tesco Underwriting Limited, or in a minority of cases by a third-party underwriter. As of Feb 25 2017, Co. had a total of 6,809 stores worldwide, including 256 franchised stores.
Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.
Proxinvest main services are :
- Proxy reports
- Definition and monitoring of client customized voting guidelines
- Corporate Governance Data and Rating
- Thematic research
- Engagement support
Proxinvest has been a pioneer and champion of good corporate governance and has grown into a recognised expert in the field.
Proxinvest is independently-owned and only works for investors : Proxinvest does not provide consulting services to the companies it covers, mitigating related risks to its clients and ensuring the independence of our analysis. As a result Proxinvest is able to take a robust, independent, engaged and unconflicted view of the companies in which our clients invest.
As Managing Partner of Expert Corprate Governance Service Ltd (ECGS), Proxinvest has built a large network of corporate governance experts to support clients in corporate governance analysis worldwide.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.