A Paris-based hedge fund is reportedly pressuring Ahold Delhaize to put to a vote a corporate entity that can be used to defend against unwanted acquirers of its stock.
The fund, known as CIAM, said Ahold’s governance structure—known as a foundation, or “stitching”—acts as a “poison pill” to potential suitors and has served to keep its share price depressed, according to a Reuters report.
CIAM was not immediately available for comment. An Ahold spokesman told Reuters the company would discuss the policy at its annual meeting next month, but was not expected to ask shareholders to vote on it.
CIAM describes itself as a hedge fund that takes "positions around corporate events having a superior reward to risk profile." Reuters said it holds approximately 1% of the retailer's stock.
Common for companies based in the Netherlands, a foundation structure allows for a separate class of preferred voting shares with low values that theoretically can be issued to dilute voting power. Some investors feel this helps depress the trading price of Dutch companies, and could make it difficult for investors to gain influence.
Ahold adopted such a structure in 2003. It operates the Stop & Shop, Giant, Hannaford and Food Lion chains in the U.S.