By Toby Sterling
AMSTERDAM (Reuters) - Investors in Dutch-Belgian supermarket retailer Ahold Delhaize (AS:AD) on Wednesday called on management to give them a vote on its plans to maintain protection against unwanted takeovers that is set to expire in December.
The company's boards argue they can retain the mechanism -- which gives an independent body the right to issue shares to thwart a takeover - without shareholder approval.
Catherine Berjal, the co-founder of French investment fund CIAM, told Reuters that if Ahold Delhaize declined to let investors decide, she would ask a judge at Amsterdam's Enterprise Chamber to call an extraordinary shareholders' meeting to vote on the matter anyway.
"The authorisation to issue shares is given to shareholders by law," she said in an interview ahead of Ahold Delhaize's annual shareholder meeting.
"We really think it's unlawful" for the company to deny shareholders a vote, she added.
She said Dutch corporate law, which gives a company's boards the right to determine strategy, was adequate protection against takeovers.
There is also a concern that overly robust takeover defences could breed complacency among company management and lead to undervaluation of the share price.
However Ahold Delhaize's chief legal officer, Jan Ernst de Groot, told shareholders gathered in the Dutch capital that "the basic agreement knows no limitation in time. That means the way is free for the parties to extend it."
Ahold hasn't actually made up its mind yet, he said but "we are convinced it won’t conflict with the law if we decide to extend" the agreement.
Ahold Delhaize's position has also been challenged by Dutch shareholders' association VEB, which spoke out against management's position at the annual meeting.
"In all the years (since 2003) you've misled shareholders into believing that they actually had a say in extending the option. We regret this and consider it poor governance," the VEB's Jasper Jansen said.
Ahold Delhaize has said it will allow discussion of the matter, but no vote.
In 2016, the company briefly put an extension of the takeover defence on the agenda for that year's annual meeting, but retracted it after shareholder corporate governance advisory group Glass Lewis advised a "no" vote.
Berjal, whose fund holds less than 1 percent of Ahold Delhaize's shares, said she had the support of investors owning at least 10 percent of the company's shares, and that they would pool legal costs, if necessary.
"We believe management has done a really good job," she said referring to the integration of Delhaize, which Ahold purchased for 9.3 billion euros ($11.5 billion) in 2015.
"I trust them. But I don't want them to do nothing (become complacent) because they are protected."
($1 = 0.8076 euros)