Chairman attacks Liberty family's 'back door bid'

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The Independent Online
The board of Liberty, the troubled retailer, yesterday attacked the company's founding family, saying its attempt to oust the group's chairman would destabilise the business and place the remaining directors in an untenable position. Denis Cassidy, chairman, said that instead of attempting a `back door takeover', the family should make a formal bid or back off. Nigel Cope, City Correspondent, reports on a bitter battle.

Launching an offensive against the Stewart-Liberty family and the rebel shareholder, Bryan Myerson, Mr Cassidy said their behaviour was wholly inappropriate for a public company. "It's shareholders behaving badly," he said. "If they want to run it as a family business then they should make an offer to all shareholders. But what we have is a couple of shareholders behaving as if this is a private company of which they are proprietors."

He accused the family and Mr Myerson of forming an "unlikely and short term alliance" to gain control of the business without paying a premium. Mr Cassidy said that if the family successfully ousted him as chairman and replaced him with Mr Myerson and Odile Griffith, the family's financial representative, then the rest of the board would be placed in an untenable position. "Presumably they too may also be threatened with removal," Mr Cassidy said. In a circular sent to shareholders yesterday, the board said the family's plans would threaten the strategy of the company at a crucial time. It said Liberty's entire set of advisers would resign if Mr Cassidy was ousted. In addition to Cazenove, these include Barings, its financial advisers, and Slaughter and May, its lawyers.

It also said that Barclays would reconsider its position regarding the pounds 40m redevelopment of the flagship Regent Street store if the family's plans to remove Mr Cassidy were successful.

The family rejected the board's accusations as "nonsense". Ms Griffith said it would make no difference if all the group's advisers resigned as replacements could easily be found. She also said that the family were quite happy to work with the remainder of the board and that the family had written to them to that effect. "We are not intending to appoint a lot of patsies to the board that will take instructions from us," Ms Griffith said.

She said the family had decided to remove Mr Cassidy because they did not support his plans to spend pounds 43m on redeveloping the Regent Street store. "We accept that the store needs improvement with air conditioning and escalators but we do not believe that pounds 43m is appropriate."

The board will now try to win enough support to defeat the resolution to remove Mr Cassidy at the emergency meeting, which has been set for 11 December. This will be difficult as the family and Mr Myerson control 44 per cent of the shares between them.

The board will start talking to institutional investors immediately. They control 23 per cent of the shares while the extended Stewart-Liberty family controls an additional 27 per cent. The family is also set to lobby for additional support and will send out its response to the board's circular shortly.

Mr Cassidy was in reflective mood yesterday on his decision to join Liberty in the first place. "I turned the job down on a number of occasions before accepting it. I do not regret coming in because it is a lovely business with a good team. It just needs a little push. But if I'm herded off then I will regret having wasted two and a half years of my life."

He also warned that if he was ousted "it would be a savage blow to small businesses which seek to recruit professional managers".

The Liberty board, which put the 120-year-old business up for sale earlier this month, said it had received several expressions of interest both from UK and overseas groups. The company is currently valued at pounds 85m at yesterday's share price of 375p, down 20p yesterday.