Retail investors in Aviva PLC (LSE:AV.) have until 3 April to vote on the company’s proposal to cancel four classes of preference shares, following the launch of a new tender offer, with a general meeting vote scheduled for 15 April.
The life insurer failed in a previous attempt in 2018, when it proposed buying the preference shares back at par, leading to investor backlash and a collapse in value.
This time, the FTSE 100 group has offered a premium above market prices for each of the Aviva and General Accident prefs.
Russ Mould, investment director at AJ Bell, said: "Investors who wish to frustrate this plan for a second time and retain the flow of income from the instruments, instead of potentially banking a capital gain on their investment, can cast their vote by 3 April and make their voice heard at the General Meeting which will take place on 15 April."
Aviva’s preference shares are classified as irredeemable, meaning investors had expected to retain access to ongoing income from the instruments.
Mould noted that while the company’s improved financial position under CEO Amanda Blanc supports coupon payments, the cancellation plan may leave holders “feeling caught up in the turnaround, rather than buoyed by it.”
If approved, all four preference shares will be retired.
If rejected, Aviva intends to proceed with a tender offer allowing eligible holders to sell some or all of their holdings.
At the time of the 2018 vote, many holders of the prefs were also annoyed by the company's attempts to buy back the four separate preference shares at par value, prompting a collapse in the value of the instruments and forcing Aviva to offer a payment to those who sold, in an attempt to try and smooth over the row.
CEO at the time Mark Wilson said then: "The reputation of Aviva, and the trust people have in us, is paramount. Our announcement today means that preference shareholders can rest secure in their holdings."