SVM Disapproves of Mears Group Board’s Lack of Transparency
July 12 2018 - 1:29PM
Business Wire
A fund advised by Shareholder Value Management AG (“SVM”),
holding 8.93% of Mears Group Plc’s (“the Company”) issued share
capital, has highlighted its disapproval of the Company’s board
over its lack of transparency after it rejected SVM’s proposal to
allow shareholders to vote on its next chairman.
Mears Group announced this morning that it has rejected SVM’s
further resolution to provide shareholders with the opportunity to
vote on the Company’s next chairman at its upcoming General Meeting
(GM). SVM called for a GM last week to request the removal of the
Group’s chairman, Bob Holt, and the appointment of a new,
independent non-executive director (NED), Andy Hogarth. Upon the
appointment of Mr. Hogarth as a director, SVM urged the board to
appoint him chairman in a timely fashion.
However, Mears Group replied by saying board appointments should
not “be imposed on us by a single shareholder.” SVM therefore felt
that it would be in the best interests of the markets and the
ultimate form of shareholder democracy to put the appointment of
Mr. Hogarth as chairman to a shareholder vote, and thus
requisitioned an additional resolution to be added to the agenda
stating:
1. THAT, conditional upon resolution 1 of the
requisition dated 2 July 2018 being passed at the general meeting
of the Company convened to consider such resolution, that the board
of directors of the Company be and is hereby requested to appoint
Mr Andy Hogarth as the chairman of the board of directors of the
Company.
Given that the resolution would have been non-binding, it is
clear to SVM that the Company fears the outcome of the vote which
further underlines the need for change.
SVM is evaluating further actions.
Gianluca Ferrari, Director at Shareholder Value Management
AG, said:
“We are extremely disappointed by the Company’s stance. It is
our responsibility to call for better corporate governance at Mears
in the interest of increasing shareholder value. To dismiss our
request to give all shareholders a voice on the position of
chairman and shielding their actions behind procedural formalities
while ignoring the elephants in the room, for example the
stagnating share price, lack of independence at the helm and most
importantly, poor capital allocation, proves our point that swift
change is necessary.”
“We are confident that our disappointment will also be shared by
many other shareholders who, like ourselves, expect a rapid
turnaround in Mears’ fortunes. Increasing shareholder participation
can only work to the Company’s advantage.”
Mr. Hogarth joined Staffline Plc as finance director in November
2004 and became CEO in 2009. Under his leadership, Staffline grew
revenues and profitability at a compounded annual rate of
approximately 30%, with annualized returns to shareholders in
excess of 50%.
He has held senior roles in a wide range of businesses including
retail, support services, healthcare, hospitality and construction.
He led the MBO and subsequent trade sale in 2002 of Pipeline
Constructors Group, a £100m utility services business. Mr. Hogarth
is entirely independent of SVM.
Shareholder Value Management AG is a Frankfurt based investment
company with EUR 3 billion in assets under management/advisory. SVM
follows the principles of "Value Investing" and adopts an active
approach to the management of its portfolio companies, frequently
engaging in constructive dialog and collaborating with them to
contribute to long-term value creation for shareholders.
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Shareholder Value Management AGPress
enquiries:Peregrine CommunicationsDanny Calogero, +44 20
3040 0873danny.calogero@peregrinecommunications.comorAryna
Kastavetskaya, 44 (0) 20 3040
0871aryna.kastavetskaya@peregrinecommunications.comorShareholder
enquiries:GeorgesonAnthony Kluk, +44 (0) 20 7019
7032Anthony.kluk@georgeson.com
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