Attorney’s power

A purchase of own shares is being undertaken using a ‘single contract with multiple completions’ and the shares are to be bought back in three tranches.

Our understanding is that the vendor should lose beneficial entitlement to all the shares at the date of the first completion when the first tranche of shares is bought back. We had thought that this could be achieved through provisions within the share buyback contract (i.e. provisions waiving voting rights and entitlement to dividends).

However advice given indicates that this would not be effective at reducing the vendor’s interest to less than 30% and instead the shares should be converted to non-voting shares without dividend entitlement.

Apart from the requirement to follow some additional legal procedures (and so incur additional costs!) to convert the shares in the way advised this would...