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LONDON (Alliance News) - City of London Investment Group PLC said Tuesday it has informed Lazard World Trust Fund that it will oppose the renewing of the company's buyback authority at the extraordinary general meeting at the end of the month.
In a letter sent to the board of Lazard, City of London said: "The emergency general meeting circular gives shareholders no clarity regarding why the board resumed the buyback programme at narrow discounts after a prolonged hiatus during which the discount has been much wider. There are also no clear assurances given regarding how the buyback will operate in future."
The asset management company mame it clear to Lazard it is unsure why the emergency general meeting is being held three weeks before the already-delayed annual general meeting.
City of London continued: "Since June, Lazard has repurchased about three million shares at an average discount between 3% and 4%. At the time of writing, the board can repurchase an additional 2.4 million shares - about 7.2% of issued shares, excluding shares held in treasury - from the approval granted at the annual general meeting last year."
"We therefore question the need to convene an additional shareholder meeting so close to the delayed 2018 annual general meeting, for the sole purpose of renewing the buyback authority."
In 2010, Lazard "set out a discount management policy" but City of London believes that Lazard has "otherwise shown no discernible commitment to credible discount control until June this year".
If Lazard does not pass the continuation resolution at the 2018 annual general meeting, City of London believes the company should "bring forward proposals fro Lazard's liquidation with a facility for shareholders who so wish to roll into the Lazard Emerging World Fund UCITS".
Shares in City of London closed down 1.4% Tuesday at 388.00 pence each. Lazard closed down 0.8% at 381.12p.