Companies with two share classes (A & B)
Hi all,
Just got a quick question for you here. Has there been a company, which had two share classes (A & B) and then eventually merged them into one? Thanks for your help in advance.
Hi all,
Just got a quick question for you here. Has there been a company, which had two share classes (A & B) and then eventually merged them into one? Thanks for your help in advance.
Career Resources
Yes this happens. Usually the difference between the two classes relates to voting rights. For simplicity purposes, a company may convert its A shares to B shares so there is only one class of shares.
The conversion may be done at the equivalent voting %. But there are a lot of different scenarios that could come up, like meeting certain conversion criteria which could trigger a conversion event. You may need to be more specific for us to explain how it may apply to the situation you have in mind.
Hi WhaleofWallStreet Thanks for the comment. I am aware of why they do it, but just wanted to find a company with a history of merging its different share classes into one and take a look at it. By any chance, do you have any name that comes to mind?
Here's a throwback for you...
http://www.independent.co.uk/news/business/wh-smith-to-merge-two-share-…
"WH SMITH, the retailer and newspaper distributer, yesterday broke with a 40-year tradition when it announced that it was to merge its two classes of shares. The group's B shares date from 1949, when it was floated as a public company after the death of its founder Lord Hamilton. They have a nominal value of 10p, a fifth of the 'A' shares but equal voting rights, and were designed to give the family protection after the company went public. They receive only a fifth of the A share dividend, however.
Under proposals that have to be agreed with shareholders, five B shares will be merged to create an A share. As compensation for the loss of voting rights, holders will be given 15 new shares for every 100 B shares held before consolidation."
Hmm... I can't recall who it was but there was definitely a Canadian company that tried this a few year back. Maybe Telus? I think it was eventually voted down though.
You're right. They used to have a dual class structure. Also, Magna International in Canada. Thanks for the input!
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