Major to advise company at centre of Astec furore
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Your support makes all the difference.JOHN MAJOR, the former prime minister, has been appointed chairman of the European Advisory Council of Emerson Electric Company, the American group that provoked a storm of opposition in the City last year over its aggressive takeover tactics.
Emerson, an electronics giant based in St Louis, Missouri, was faced by legal action by 18 City institutions when it sought to buy out the minority shareholders in Astec, a UK listed company, in spring 1998.
Mr Major already has an advisory role with another US company, Carlyle Group, based in Washington DC. Carlyle Group has been seeking a deal with Vickers, the British company, over the manufacture of armoured vehicles.
The ex-prime minister is still active politically, addressing the House of Commons on Tuesday on the proposed reform of the House of Lords.
Mr Major's new job is likely to raise eyebrows in the City. Emerson had built a 51 per cent stake in Astec and then offered to buy out the rest at the prevailing market price of 111p. At the same time Emerson announced its intention to remove three Astec executive directors and replace them with Emerson appointees, while also voting to stop Astec's dividend payments.
This prompted the 18 mainly British institutions which represented a quarter of Astec's shares to issue a statement saying they "protested vigorously at the tactics currently employed by Emerson in its attempt to wrest control from Astec's independent board".
The group included Clerical Medical, Electra Fleming, Legal & General, Norwich Union and Royal & SunAlliance. They challenged Emerson's tactics in the courts, but lost. Emerson retreated and then quietly bought the remaining Astec shares at the end of last year.
An Emerson spokesman said Mr Major's new role was "designed to advise Emerson on the changing business climate in Europe. He will be paid, but the amount is confidential. The Advisory Council will meet two or three times a year, and Mr Major may be consulted on an ad hoc basis."
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