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
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
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.