The three largest shareholders in the European publishing group Mecom have moved to oust its founder, David Montgomery, a former editor of News of the World.
Aviva Investors, Invesco and Legal & General Investment Management, which collectively own more than 50 per cent of the company, want to replace Mr Montgomery as chief executive with the experienced broadcasting executive Patrick Tillieux, it emerged yesterday.
Mecom's board, led by its chairman, Alasdair Locke, held talks with the rebel shareholders in London yesterday in the latest of a series of meetings. It rejected the institutions' demand that the board commit to replacing Mr Montgomery and Mecom's chief operating officer, Keith Allen, by the company's trading update next month.
The fund managers are now considering calling an extraordinary meeting to push through their proposals. One source close to the investors said: "They have decided they have had enough and want a change."
David Lis, the head of UK equities at Aviva, would only say: "We have been engaged in discussions with Mecom on a regular basis regarding succession planning." Invesco and Legal & General were not available for comment. Mecom also declined to comment.
Insiders at the publisher, which owns newspapers in countries including the Netherlands, Denmark and Poland, said they were shocked when the "rumblings" first emerged from the major shareholders before the summer.
The institutions had previously backed Mr Montgomery after a failed coup in January 2009. Six non-executive directors resigned after they failed to unseat Mr Montgomery, who was then executive chairman.
They also supported the rights issue which was launched by the company several months later. Mecom pointed to its half-yearly report in July, which showed pre-tax losses had narrowed.
A source close to Mecom said: "The board is none the wiser as to why there has been such a U-turn." Yet the source close to the investors said: "There is a view that the company would be better run with new management."
They have proposed the appointment of Mr Tillieux, former chief operating officer of ProSiebenSat.1, one of Germany's two main private broadcasters. The Mecom board has met Mr Tillieux, and has decided, after due diligence by headhunter Russell Reynolds, that he would not make a suitable replacement.