LONDON - LucasVarity Chairman Victor Rice may resurrect the idea of moving his company to the USA. He failed to win approval for the relocation from shareholders earlier this month.
Rice has said that the stock market in the USA is better suited to the supplier's plans to buy other companies. Analysts expect a major acquisition within six months.
LucasVarity Corp. has gradually been severing its British connections since the merger of Lucas Industries and Rice's Varity Corp. two years ago.
All the former Lucas Industries directors have been removed from the board and Rice has gradually installed his own executives.
UK institutional and private investors narrowly defeated the proposed change of domicile. The transfer required 75 percent of the votes cast by value, but failed by less than two percent.
'What is important now is how the board recovers its credibility,' said Anthony Gill, former chairman of Lucas Industries.
Despite speculation that defeat would lead to the departure of Rice, himself an Englishman, the board has given him a vote of confidence. While Rice lost this last battle, insiders said he would continue to push for a move of domicile to the USA. But there are no immediate plans to put the proposals before shareholders a second time.
First Rice intends to regain the confidence of UK shareholders, starting by building the value of their investment.
'The strategy for the corporation will not change one iota,' Rice said. 'But we will obviously be slightly more inhibited than if we were domiciled in the USA.'
Rice said that rejection of the proposal won't affect his plans to be part of the 'consolidation of the automotive supply sector.'