LONDON: Following an attempt by rebel shareholders to oust its board, the fate of PR and marketing services group Huntsworth will be determined within a month.
LONDON: Following an attempt by rebel shareholders to oust its
board, the fate of PR and marketing services group Huntsworth will be
determined within a month.
Shandwick founder Lord Chadlington, in concert with former Halifax
chairman Jon Foulds and two other investors, recently called for an
emergency general meeting in a bid to assume control of the ailing
group. Huntsworth’s revenue slumped from more than dollars 85.5 million
10 years ago to just over dollars 30 million last year. Shareholders,
who have seen the share price drop from over pounds 200 in 1990 to
pounds 45 last week, have not been paid a dividend since 1991.
The PR arm of Huntsworth - Holmes & Marchant - also underperformed last
year, with fee growth of just 1% against an industrywide 14%
Huntsworth’s management, however, is not prepared to give up, having
repaid almost dollars 15 million in debt since the recession of the
The board has until August 2 to announce the date of the emergency
general meeting. Chadlington’s group has timed its moves to maximize
the number of private shareholders on holiday during the summer months,
which will give their 30% voting bloc added strength.
A spokesman for Huntsworth confirmed that the emergency general meeting
would take place by the end of August, the last time at which it can be
held under stock exchange rules. In the meantime, Huntsworth is trying
to find a buyer - although any deal would have to include Chadlington’s
equity, and it is unlikely he will sell unless given a high premium on
the current deflated share price.
’We are trying to sound a conciliatory note,’ said a source close to
the Huntsworth board. ’In an ideal world, (Chadlington’s) party would
come to some accommodation with the management that focuses on the
interests of all shareholders.’
A source close to Chadlington said the attempt to sell the firm shows
the lack of confidence that the existing management team, led by CEO
John Holmes, has in the company’s future. Chadlington’s plan includes
his installation as interim CEO, with Foulds as chairman and a complete
board overhaul. Group operating costs will likely be slashed as well.