Minnesota Retirement Board Won’t Support Corporate Inversion of Medtronic


The Minnesota State Board of Investment, the entity that manages assets for the state’s retirement systems, decided on Friday that it will not vote in favor of Medtronic’s acquisition Covidien.

Medtronic is Minnesota’s largest medical technology company, and Covidien is a medical supplier based in Dublin.

The retirement board has a say in the decision because it is a shareholder in both companies.

More from the Star-Tribune:

A four-member subcommittee of the state Board of Investment decided Friday morning not to vote in favor of Medtronic’s acquisition of Dublin-based healthcare supplier Covidien during shareholder voting next week. Critics on the committee said they were concerned that the stock-and-cash transaction would help Fridley-based Medtronic avoid taxes while providing “preferential” tax perks to executives.

Medtronic and Covidien shareholders will vote Tuesday on whether to approve the deal. The state retirement board can participate because it controls 117,130 Medtronic shares and 427,825 Covidien shares through its various retirement and trust funds. Board rules say its staff needs committee approval before casting proxy votes in controversial cases.

The Medtronic deal has proved controversial because it is structured as a corporate inversion that will move the combined company’s legal address being in Ireland, while leaving “operational” headquarters in Minnesota. Such deals have been criticized for helping multinational companies avoid domestic taxes.

Medtronic management is also urging shareholders to support the company paying an estimated $73 million to cover special excise taxes on executive stock options that will come due as part of the inversion. Board members said there was clear precedent to vote against deals that contain an executive “golden parachute.”

The Minnesota State Board of Investment manages $78.2 billion in assets.


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Video: CalPERS Portfolio Manager on Using Influence to Improve Corporate Governance


This video features a discussion with Anne Simpson, CalPERS Senior Portfolio Manager and Director of Global Governance, about how the pension fund uses its influence as a major shareholder to change corporate governance and push for better social and environmental practices within corporations.

Ontario Teachers’ Pension Boosts Stake in UK Airport


The Ontario Teachers’ Pension Plan has increased its stake in Birmingham airport after the airport reported its busiest November on record.

The pension fund’s stake in the airport now totals 48 percent.

From the Financial Times:

The Birmingham deal comes a week after the regional airport said passenger numbers in November were the highest ever at 646,000, up 10 per cent on the previous year. It was the sixth record-breaking month in 2014 and the airport said it expected Christmas traveller numbers to be 7.4 per cent higher than last year.

“Birmingham airport is a high-quality asset that we know well. It has good growth prospects and we look forward to working with our partners to strengthen its position as a key regional airport in the UK,” said Andrew Claerhout, senior vice-president at Teachers’.

Birmingham is the UK’s seventh busiest airport with more than 9m passengers passing through its doors in 2013, according to the UK’s Civil Aviation Authority. Heathrow airport is the largest with 72m passengers, double the number of passengers of its nearest competitor, Gatwick.

Teachers’ first invested in Birmingham airport in 2001 and later acquired a joint 48.25 per cent stake with Victorian Funds Management Corporation in 2007 for £420m after the Dublin Airport Authority and Macquarie Airports Group sold their holdings.

The Canadian pension fund now has a sole 48.25 per cent stake, in addition to other airport investments in Copenhagen, Brussels and Bristol. Seven local district councils will continue to own a significant shareholding in the airport.

“We will continue to work with Teachers’ and the district shareholders with the shared goal of developing Birmingham airport’s connectivity to benefit both the region and the UK as a whole,” said Paul Kehoe, chief executive of Birmingham airport.

The Ontario Teachers’ Pension Plan manages over $140 billion in assets.

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