Payoff anger as Wheway yields to bid

WHEWAY, the loss-making and heavily indebted engineering company, yesterday capitulated to McLeod Russell, the paint group, giving in as angry shareholders gathered for its annual meeting in Birmingham.

The Wheway board's acceptance of the McLeod bid after four months of talks did little to calm tempers at the meeting. Hugh Ashton, chairman, had to fend off a series of quick-fire, hostile questions. Despite the bid recommendation, private shareholders focused on severance payments due to past and incumbent Wheway executives.

Wheway disclosed it had borrowings totalling pounds 22m - equivalent to nearly 150 per cent of its net assets. Since the autumn, Wheway has admitted it needed to find a partner to provide financial support. Yesterday the company said talks with rival suitors had proved fruitless. 'Although the offer does not recognise the relative sizes of the two companies in terms of turnover or potential, it does recognise the weak state of Wheway's balance sheet,' Mr Ashton said.

John McGowan, the company's chief executive for 10 years until his departure last November, is set to receive pounds 407,000. He has claimed pounds 280,000 for loss of office, pounds 79,000 pension contributions, pounds 12,500 legal costs and pounds 9,000 a month in consultancy fees until next May.

In November, while talks with McLeod were under way, Mr McGowan was replaced by Brian Long as chief executive. Under the new McLeod management, neither he nor a new finance director, Brian Boswell, is likely to be required.

However, Wheway has promised to pay Mr Long pounds 230,000 if the company is taken over. Mr Boswell has a two-year service contract at pounds 85,000 a year. In all, severance payments could reach pounds 800,000 or more.

One private investor at yesterday's meeting asked Mr Ashton if it was possible 'to question or preferably cancel payments to Mr McGowan in view of the group's lamentable performance while he was in charge'.

Mr Ashton told him that the pay agreements were legally binding. He added that Mr McGowan had not received his full entitlement under the strict terms of his contract.

The McLeod offer takes the form of a one-for-10 share swap, which values each Wheway share at 9.5p and the whole company at pounds 13.3m, with McLeod Russell down 5p at 95p.

Nigel Openshaw, McLeod's chairman, pledged to hold a full review of severance terms in his company's offer document, which said: 'It is not proposed . . . that any payment or other benefits shall be made or given to any director of Wheway as compensation for loss of office.'

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer with T-SQL, Watford, Hertfordshire - £350 - £360

£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...

Chief Financial Officer

120-150k: Accountancy Action: We are looking for an experienced CFO from a min...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?