Spirent is set for a Christmas showdown with its largest shareholder Sherborne Investors after revealing that its independent directors will resign if the activist shareholder succeeds in ousting the company's chairman.
Sherborne owns 14 per cent of the telecoms testing company and has called an extraordinary general meeting to force out John Weston, chairman of Spirent, and two other board members. Sherborne wants to appoint Edward Bramson, chairman and chief executive of Sherborne, as chairman, and three other nominees to the board. It believes it has the support of the majority of shareholders.
Spirent will hold the EGM on December 22. It has urged its shareholders to reject Sherborne's plans. In its circular to shareholders, it has argued that voting for Sherborne's plan would breach a number of key principles of the Combined Code of Corporate Governance as well as ceding effective control of the company to the activist shareholder.
It said that its independent directors - Kurt Hellstroem, previously president and chief executive of Swedish telecoms equipment giant Ericsson, and Mark Beresford, a former chief executive of GKN - would immediately resign if Sherborne is successful due to concerns over corporate governance.
Spirent also attacked Sherborne for not clearly stating an alternative strategy. It said that since 2002, its management has overseen a restructuring plan that has more than trebled Spirent's share price, while £33m a year. It also plans to return £100m of cash to shareholders.
Last year Mr Bramson forced out the management of the chemical company Elementis after building a 15 per cent stake in the business.
He also led the ousting of the management at 4imprint, a promotional merchandising company, before turning the company around. Shares in those companies have trebled since Mr Bramson took over. The investment bank UBS said Mr Bramson has "a remarkable track record".Reuse content