The parent company of Liberty Global, the UK communications giant, is said to be heading for a showdown with shareholders over its plan to redomicile to the island.

Britain’s Daily Telegraph newspaper has reported that City sources said independent shareholders are planning to vote against the move at an extraordinary general meeting later this year.

The relocation will lower the threshold required for key shareholder votes from its current level of 75 per cent to 50 per cent, handing more power to cable entrepreneur John Malone, who controls Liberty Global, and chief executive Mike Fries, the newspaper said.

Mr Malone and Mr Fries hold about 8 per cent of Liberty’s shares, but together control more than 40 per cent of votes, the Telegraph reported.

Liberty Global, which owned the UK’s largest cable company Virgin, in 2020 merged with Telefonica – which owned Britain’s biggest mobile operator O₂ – in a £31 billion merger deal.

The broadband and mobile giant has around 48 million UK customers, the Telegraph said.

The newspaper said the company is already facing a revolt over executive pay and governance practices ahead of its annual shareholder meeting, which is scheduled for June 14.

Influential advisory groups Institutional Shareholder Services and Glass Lewis have called for investors to vote down plans to elect a British non-executive director to the board, the paper said.

It added that both ISS and Glass Lewis have also urged investors to vote down Mr Fries’ $19 million compensation package.

The Royal Gazette reported in April that Mr Fries had filed a preliminary proxy statement with the US Securities and Exchange Commission.

In it, he wrote: “Today, we are incorporated as an England and Wales company, listed on Nasdaq, and as a result there are cumbersome administrative processes. The proposed transaction will have no change to our listing on Nasdaq, our day-to-day operations or the tax residence of our operating companies.”

He added: “The principal objective of the change in jurisdiction of incorporation is to facilitate shareholder value creation by aligning the US style corporate law of Bermuda with our listing on Nasdaq and the expectations of our largely US shareholder base.

“Key components of our strategy to create shareholder value may include, among others, financing, cross-border M&A and investments, share buybacks, self-tender offers, spin-offs and split-offs, all of which are easier to execute as a Bermuda company.

“The transaction is not tax driven. Our revenue and income remains European based and our subsidiaries’ tax residence will not be changing.”

The redomiciliation will be effected pursuant to a scheme of arrangement under English law and will be subject to approval by Liberty Global’s shareholders and the High Court of Justice of England and Wales.

Mr Fries wrote: “As an overview, we will hold separate UK court meetings for each of our three classes of shares and then a UK general meeting of our voting shares, followed by a shareholders meeting to have non-binding advisory votes on proposed governance changes.”

The board of directors of Liberty Global plc has approved the proposal of the scheme of the arrangement, including the redomiciliation, the preliminary proxy statement filed with the SEC said.