The hedge fund TCI's attack on management at the Dutch bank ABN Amro could lead to "rash decision making" and "further increase risk of failing performance", according to the world's biggest corporate governance watchdog.
In a sharply critical analysis of the London hedge fund's demand for a break-up at the bank, ISS - which advises shareholders how to vote at annual general meetings - accused TCI of "cornering the management board". It added: "ISS is of the opinion that any major restructuring operation should be done after careful planning and with the full support of management."
Shareholders were urged to reject all five of TCI's rebel motions, which included a demand for a break-up, a return of cash to shareholders, and that the bank look at a takeover or merger. ISS went on: "The merit of the TCI proposals is that they have pointed out certain sore points and thereby put pressure on the management to intensify its efforts to increase performance and shareholder value.
"Whether that should be done by selling the whole or parts of the company is much less obvious and a forced break-up without management support significantly increases risk for shareholders."
TCI's attack on ABN - contained in a letter to its board last month - is widely seen as having put the bank in play …