Salvesen shakes up top team ahead of break-up

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The Independent Online
Christian Salvesen, the Edinburgh-based conglomerate facing attack for its radical break-up proposals, yesterday announced that Sir Alick Rankin was to step down as chairman, with chief executive Chris Masters moving over to head up the smaller Aggreko hire business.

The moves came as it emerged that rebel shareholders led by the former chairman, Sir Gerald Elliot, were ready to put up a rival management team led by a "heavy hitter" to replace the present incumbents.

Mr Masters last night dismissed any suggestion that the top-level changes had been prompted by Sir Gerald's campaign to scupper plans to spin off Aggreko and pay a pounds 150m special dividend. He said it had been well known since early last year that Sir Alick was due to step down at the annual meeting in July.

He also brushed aside any idea that he was being demoted when he left the helm of the larger group. "I am totally and utterly confident and happy with having been offered and accepted the position of executive chairman of Aggreko," he said.

There had been no pressure from the Elliot camp. "We have had no institutions expressing concern over the demerger to us. Gerald took the business public. He has a viewpoint. He seems to be a fan of conglomerates. He seems to believe that under no circumstances should companies return cash to shareholders. I happen to disagree with that."

Sir Gerald refused to comment on yesterday's changes. He will not name his alternative management team until Salvesen comes up with a date for the extraordinary general meeting to approve the proposals, rumoured to be set for 13 March, with the document to shareholders said to be ready to go out on 17 February.

Sir Gerald, who is a member of the founding Salvesen family which still owns 37 per cent of the group, has brought in Sutherlands, an Edinburgh stockbroker, and Quayle Munro, a boutique corporate finance house also based in the Scottish capital, to back his campaign.

The changes at Salvesen will see Sir Alick being replaced by Jonathan Fry, a non-executive director who is currently chief executive of Burmah Castrol.Edward Roderick is to become chief executive of the rump Salvesen business of transport and frozen vegetable processing. Mr Roderick only joined the group last year as managing director of the industrial division of Salvesen Logistics.

Ironically he joined from Hays, the group whose abortive pounds 1.1bn bid last summer triggered the move to break up the company as an attempt to assuage shareholders' concerns about the poor performance of Salvesen's shares.

David York, who has been with Aggreko since its formation in 1973, moves up to become managing director, while Ian Adam remains as finance director of the Salvesen rump.

The rebels remain confident they have a sympathetic ear from big shareholders. A spokesman said: "Sir Gerald has been well received by the institutions, some of whom have been critical of the management and its proposals."

But many still remain to be convinced, even in Scotland. One of the bigger institutional shareholders said this week: "My view is that Elliot has not proposed anything of substance which makes me want to reject the board's proposals."

Another said: "On balance, mine is still a supportive view, but I would like to see what Salvesen comes up with." He said the crucial issue was how the new companies proposed to handle the extra debt taken on as a result of the special dividend payouts.

Another observer was more robust, describing Sir Gerald as "one of the old-style Edinburgh mafia who wants to go backwards in time".