GEC shareholders to block Weinstock

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The Independent Online
Some of GEC's key institutional shareholders are preparing to fight any attempt by Lord Weinstock to install his son, Simon, as head of the defence electronics giant.

Despite Lord Weinstock's indications to investors last year that GEC's nominations committee was planning to resolve the succession issue, investors say little progress seems to have been made. Their concerns were fuelled by what were described by one fund manger as "whisperings" about Lord Weinstock's son being groomed to replace him as managing director.

"Institutions would be horrified if Simon Weinstock was imposed as head. People who know him tell me he is not the right candidate to lead the company," the fund manager said.

Lord Weinstock, 71, is due to step down next year, though he is unlikely to leave the company completely. There is also confusion about the position of Lord Prior, who is expected to relinquish the chairmanship at around the same time.

Simon Weinstock, 43, joined GEC as commercial manager in 1983, and joined the board as commercial director in 1987. He is the largest shareholder on the board, with 31 million shares.

Another institution said that, although the succession had been an issue for years, concern had grown because there was now a deadline due to Lord Weinstock stepping down.

GEC's recent stock market underperformance has heightened concerns that Lord Weinstock may be losing his grip on the empire. "It is not as if the company is sitting on a unique pedestal of performance," said one institution. "Quoted companies live or die by their long-term share price performance. Recently GEC has lagged the market."

While the share price of other major UK manufacturers, like British Aerospace or GKN, have sped ahead on news of big orders or increased profits, GEC's shares have languished.

Contenders for the top job include Peter Gershon, managing director of GPT, and Jim Cronin of GEC Alsthom.