Tate & Lyle uses new listing rules to bypass vote on Kelco deal

Tate & Lyle has taken advantage of the City regulator’s new listing rules to forgo a shareholder vote on the acquisition of CP Kelco, a US speciality ingredients maker.

The FTSE 250 food and beverage company said on Thursday that the deal first announced on 20 June, would no longer go to a vote among its investors after new measures from the Financial Conduct Authority (FCA) took effect on 29 July.

The biggest shake-up to the FCA’s listing regime in 30 years, the new rules allow companies to carry out more activities without a shareholder vote, including “significant or related party transactions”.

Shareholder approval is still required for so-called “key events”, like reverse takeovers and proposals to remove a company’s shares from an exchange.

Under the new rules, Tate & Lyle was also required to publicly disclose “additional information” on the transaction, including its strategic rationale and financial effects.

The firm agreed to purchase Atlanta-based CP Kelco from its current owner J.M. Huber Corporation for $1.8bn (£1.4bn) and take control of its three divisions in US, China and Denmark.

Tate & Lyle said the buyout, subject to regulatory approval, would position it as a “leader in mouthfeel, a critical driver of customer solutions” and strengthen its expertise across its three core platforms of sweetening, mouthfeel and fortification.

The firm expects the transaction to complete before the end of this year.

Over the last six years, Tate & Lyle has been executing a strategic transformation to become the go-to partner of choice for health food and drink businesses looking for “speciality solutions”.

The FCA’s changes came as part of wider efforts to make London’s stock market a more attractive trading venue, following a dearth of IPOs and big names snubbing the capital for better returns overseas.

However, the shake-up has unsettled some corners of the market. In June, a group of the country’s top pension funds called on the FCA to reverse the plans on the grounds they would water down protection for investors.