Hanover pulls off boardroom coup at ailing chemical firm Elementis

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The Independent Online

Hanover Investors, the active fund management group, pulled off a boardroom coup at the ailing chemicals business, Elementis, ejecting the chairman and senior non-executive director, and securing places for two of its partners on the company's board.

Hanover Investors, the active fund management group, pulled off a boardroom coup at the ailing chemicals business, Elementis, ejecting the chairman and senior non-executive director, and securing places for two of its partners on the company's board.

Edward Bramson, a partner at Hanover, was appointed as Elementis's non-executive chairman, replacing Keith Hopkins, while Matthew Peacock, another partner of Hanover, was handed a non-executive directorship. The pair will be joined by two other non-execs - Ian Brindle, the former UK chairman of PricewaterhouseCoopers, and Ken Minton, the former chief executive of Laporte, while Edward Wilson, Elementis's former senior non-executive, also resigned.

Elementis has suffered a rocky few years, as the margins on its Chromium chemicals business have entered into steady decline. After contributing more than £22m to group profits in 2000, the division ran into a loss of about £4m last year.

Hanover specialises in building stakes in underperforming companies, and taking an active role in trying to turn the business around. Its most recent successes include 4imprint, a promotional merchandise producer that has seen its share price increase more than 6.5 times since Hanover became involved with it two years ago. Having built a 15.2 per cent stake in Elementis over five months, Hanover has already helped to almost double its share price since the start of the year. Mr Peacock said Elementis was an obvious target for Hanover, and simply needed a "re-setting of its agenda", to reignite the growth in group profits.

"The Elementis situation was attractive to us as it has a US and UK element to its business," he said. "Clearly the share price was depressed at around 28p or 29p, and it had some excellent institutional shareholders who had had enough of the situation and wanted to see some change."

Mr Peacock was quick to distance himself from recent examples of "ugly" shareholder activism - such as moves by hedge funds to scupper Deutsche Börse's attempted takeover of the London Stock Exchange. He said Hanover perceived itself as a service that institutional shareholders could use to restore value in a company. He said Hanover had no intention of building its stake beyond 15 per centand said shareholders could expect to see results within the next 12 months.

Shares in Elementis rose more than 4 per cent to close at 49p yesterday, giving the company a market value of £211m.

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