Institutions back Eurotherm boss

Institutional investors, including Mercury Asset Management, the Prudential, Royal Insurance and Schroders, looked certain last night to win their attempt to reinstate Claes Hultman as chief executive of the industrial control manufacturer Eurotherm. Mr Hultman resigned two weeks ago after failing in an attempt to oust Jack Leonard, Eurotherm's chairman, who is expected to agree to early retirement.

Talks between the company and its most influential institutional investors to thrash out a compromise solution broke up last night with no settlement but a deal is expected this week.

The negotiations represent the latest development in an acrimonious boardroom bust-up that has pitched the institutions against Eurotherm's non-executive directors who, the institutions believe, forced out the man who had transformed the company.

Eurotherm's largest shareholders had known little about Mr Hultman's attempted coup and were furious when the blocking of his plan to replace Mr Leonard effectively forced him to resign. During his tenure as chief executive, Eurotherm's profits have soared from pounds 7m to pounds 34m.

Investors were dismayed at Mr Hultman's resignation and on the day of the announcement the value of the company fell 12 per cent from pounds 530m to pounds 470m. Many feared that without him at the helm, the shares would never again reach their previous levels.

The coup attempt split the board, with finance director Robert Biddle, chief operating officer Peter Wade, and 81 year-old founder James Hartnett backing Mr Hultman.