De La Rue chair secures backing proxy agencies
The under-pressure chair of De La Rue has won the backing of three proxy agencies, it was reported on Monday, ahead of a vote to remove him from the board.
De La Rue
FTSE Small Cap
According to The Times, ISS, Glass Lewis and Pirc have all recommended re-electing Kevin Loosemore at Friday’s meeting.
The meeting was called after activist investor Crystal Amber – one of De La Rue’s largest shareholders with a 10% stake – last month called for Loosemore to step down.
Board and shareholder disagree over De La Rue’s strategy. While management is focused on turning the business around, Crystal Amber believes it should consider a break-up and sale of divisions.
However, the support of the proxy shareholder groups will make it harder for Crystal Amber to oust Loosemore, who was re-elected at July's annual general meeting with 97.8% of the vote.
More than half of voting shareholders must vote in favour of his removal on Friday for Crystal Amber to be successful.
According to The Times, ISS said there was a “lack of detailed rationale” for his removal at this point, while Glass Lewis noted that Crystal Amber “has not provided a sufficient quantitative case to suggest that its solutions would be a clear improvement upon the status quo”.
Pirc said there was not enough publicly available information to warrant Loosemore's resignation.
The 209-year-old banknote printer, which has seen its share tumble more than 50% in the year to date, warned on profits last week, its third warning so far this year, after it was hit by a number of one-off costs related to restructuring efforts.
It also hit out at its auditor, after EY claimed there was a “material uncertainty” about the company as a growing concern. At the time, chief executive Clive Vacher told the Financial Times that the board “strongly disagreed” and that the auditor’s analysis was “neither plausible nor realistic”.
As at 1100 GMT, shares in De La Rue were down nearly 3% at 75.7p.