DTZ heaped misery on its shareholders yesterday as the property consultancy warned that its departing chief executive would receive a bigger pay-off than they expected and issued a profits warning.
The company also said that St George Participations, which has been in takeover talks with DTZ for at least five months, has until 17 October to "put up or shut up" under new Takeover Panel disclosure rules. The French family-run property group already owns about 55 per cent of DTZ.
Paul Idzik resigned as chief executive in August, after the company reported a slump into the red in the year to April, as DTZ suffered from a drop in public-sector work.
Shareholders were told in October 2008 that Mr Idzik was entitled to a pay-off worth 1.75 times his salary if the acquisition of DTZ prompted his departure. However, they were not made aware that his contract was amended two months later, giving him the same pay-off if he left for any other reason, except for gross misconduct.
Although Mr Idzik is still negotiationing the terms of his departure, he is expected to claim the 1.75 times his £400,000 salary – £700,000 – he is contractually owed.
DTZ's chairman, Tim Melville-Ross, a former head of the Institute of Directors, said "the company takes its disclosure obligations very seriously and regrets this oversight," adding that the board would ensure no such mistake is repeated.
"This matter was reported by DTZ to the UK Listing Authority and DTZ has discussed the company's response to this matter with them. It is possible that the UKLA may decide to take further action," Mr Melville-Ross added. Action by the UKLA could be anything from a private warning to a fine and public censor of the company and/or its executives.
Mr Melville-Ross also warned that the group, which also helps big banks to find and look after property, had experienced tougher conditions than expected in recent weeks, which were set to continue for the foreseeable future.
Shares in DTZ fell 2.8 per cent to 35p, valuing the group at £95m.Reuse content