Rebel group calls EGM in Huntsworth battle

The fate of PR and marketing services group Huntsworth will be determined within a month, following an attempt by rebel shareholders to oust the board.

The fate of PR and marketing services group Huntsworth will be

determined within a month, following an attempt by rebel shareholders to

oust the board.



Shandwick founder Lord Chadlington, in concert with former Halifax

chairman Jon Foulds and two other investors, has requisitioned an

emergency general meeting in a bid to take over and turn around the

ailing group.



Huntsworth’s revenue has slumped from over pounds 57 million ten years

ago to just over pounds 20 million last year. Shareholders, who have

seen the share price drop from over 200p in 1990 to 45p as PR Week went

to press, have not been paid a dividend since 1991.



The PR arm of Huntsworth - Holmes and Marchant - underperformed in the

PR Week Top 150 last year with fee growth of just one per cent, against

a 14 per cent average.



The company’s management is keen to hold on, having repaid almost pounds

10 million of debt since the company emerged from the recession of the

early 1990s.



The board has until 2 August to announce the EGM date, after which

Chadlington has the right to set a date. His party has planned its moves

so as to maximise the number of private shareholders on holiday during

the summer months. This will give their 30 per cent stake added relative

strength in any vote on control.



A spokesman for Huntsworth confirmed the EGM would be held by the end of

August, the last time at which it can be held under Stock Exchange

rules. Huntsworth is meanwhile trying to find a buyer, although any deal

which sold the company intact would have to include Chadlington’s

equity, and he is thought to be unlikely to sell unless he receives a

high premium on the current deflated share price.



’We are trying to sound a conciliatory note. In an ideal world the

concert party would come to some accommodation with the management that

focuses on the interests of all shareholders,’ a source close to the

Huntsworth board said.



But a source close to Chadlington said the attempt to sell the whole

firm showed the lack of self-belief the existing management, led by CEO

John Holmes, has. Chadlington’s plan includes his installation as

interim CEO, with Foulds as chairman and new managers brought in to

replace the remaining board members and cut group operating costs.



Leader, p8.



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