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from Breakingviews:

Man U investors can always vote with their feet

By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Shares without votes raise hackles. Consider the disquiet around Manchester United’s upcoming listing in Singapore, where new shareholders may be offered a package of vote-lite instruments that will entrench the Glazer family’s control. But while unorthodox, that’s not necessarily bad. Besides, investors are free to demand a discount, or boycott the IPO altogether.

Many companies break the one-share-one-vote principle. Carmaker Ford and Warren Buffett’s Berkshire Hathaway both have vote-lite and vote-heavy shares. Ditto internet companies Google and LinkedIn. Manchester United may have dreamt up an alternative by “stapling” non-voting preference shares to regular voting ones.

Reduced voting power can be problematic if managers misbehave or if takeovers arise. Take media empire News Corp, where shareholders have struggled to exert pressure on the founding Murdoch family despite their poor governance. Or Playboy founder Hugh Hefner, who used his control of voting shares to take the adult entertainment group private in 2010 for less than the owner of rival Penthouse said it would offer.

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