The Independent directors of Claims Direct, the beleaguered personal injury and compensation group, yesterday advised shareholders not to accept a buyout from the company's founders and said other parties had approached them.
In a stinging attack on Tony Sullman, chairman and founder and Colin Poole, the former chief executive who is now the deputy chairman, the independent directors urged shareholders to shun the £19.4m offered last month.
David Hankinson and David Hickey, said: "You may feel, as we do, that it is somewhat rich of Messrs Sullman and Poole to question the viability of the current business model when they were actively involved in developing Claims Direct's current method of operation."
The independent directors were reacting to the announcement yesterday from the bidders that they had posted the offer document. They said Messrs Sullman and Poole previously presented no specific ways to change the current business model when the board had met to consider recent poor financial performance by the company.
"Furthermore, although they refer in the offer document to the group requiring a major re-positioning of its operations, no specific proposals are contained in the offer document."
The independent directors pointed out that the offer, at 10p a share, was "substantially" below the share price on 20 June of 16p a share, the day Messrs Sullman and Poole got permission from the board to put together a bid.
The independent directors said the document did not contain verbal undertakings given to the board. These would have ensured that any higher or more attractive rival bid would either be accepted or matched by Messrs Sullman and Poole. And any gain on a resale of the business within a specified period would be shared by all shareholders.
The independent directors warned that the bidders required only a few shareholders to accept to win control of the group. Messrs Sullman and Poole already own 43 per cent of Claims Direct and floated the company a year ago at 180p a share, personally netting £50m and £10m, respectively.
The company's shares have collapsed in the past year from 353.5p to 10.25p yesterday.Reuse content