In our recent note on Polar Capital Global Financials – Riding the storm – we noted that its managers had been adding to the trust’s holding of Schroders non voting shares. They reasoned that the shares were cheap on the basis that the discount between the Schroders non-voting and ordinary shares was around 40% – the widest it had been since 1991.
The decision has paid off handsomely. This morning, Schroders announced a simplification of its dual share structure. Each non-voting share will be converted into one ordinary share and have all the same rights as the existing ordinary shares, including full voting rights. To compensate ordinary shareholders, holders of ordinary shares will receive a bonus issue of three additional ordinary shares for every 17 they hold ahead of the enfranchisement of the non-voting stocks – in order to compensate them for the dilution of their voting rights.
The non-voting shares have soared in price today – up about 29% when we last looked.
PCFT / SDR : Polar Cap Financials benefits as Schroders sorts out capital structure