AIM-listed indian property investor Hirco has abandoned a reverse takeover by the Hiranandani family.
Hirco, the Indian investment vehicle of Hiranandani, said that it would not be pushing ahead with the reverse takeover announced on 19 December.
An extraordinary general meeting to vote on the proposal was adjourned on 16 January after shareholders expressed dissatisfaction with the proposals.
Hirco said today that the 28-day statutory merger period could not now recommence and complete in the remaining period prior to the merger long-stop date of 28 February.
The move had faced strong opposition from shareholders - including activist investor Laxey - who were concerned about the terms of the deal which would see shareholders lose their preferential claim on £350.8m of the shares that pay an annual dividend of 12%.
It was proposed that Hirco would buy two schemes and the development arm of Hiranandani for 73.27m new shares, which would give the Hiranandani family a 50.6% stake in the enlarged company.
Laxey, which is a 10% shareholder in Hirco, described the plans as 'shocking' and 'ill-conceived'. Hirco said today that shareholders had asked for clarification of its dividend policy.
'The board is happy to confirm that, subject only to Hirco's own working capital requirements, it is committed to Hirco paying dividends equivalent to any cash flows it receives from the Hiranandani Investment Companies, as soon as reasonably practicable following receipt,' it said.
'The board recognises that this is a priority for Hirco shareholders.'
It added: 'Discussions with key shareholders will continue on the future direction of the company'.