The announcement could come as early as tomorrow, after a meeting of Trafalgar's board to discuss the results of the tender offer for 15 per cent of its shares by Hongkong Land that closed on Friday.
The offer for shares at 85p, 0.5p below the closing market price last week, is understood to have been a flop after attracting almost no acceptances from Trafalgar's shareholders. The results of the offer will be announced early on Monday.
'When has a tender offer ever really succeeded?' asked a Hongkong Land adviser on Friday. 'The point was simply to make known our interest in the company.'
Most institutional shareholders thought the tender price was far too low, but the offer has crystallised their feelings of dissatisfaction with Trafalgar's performance. The company has publicly promised significant board changes, including the appointment of two new non- executive directors.
Institutional shareholders believe that the quickest way to engineer a recovery in the share price, however, is for Sir Nigel, the chairman, and Sir Eric, the chief executive, to resign. They are seen as responsible for Trafalgar's faltering performance and the damaging purchase of Davy Corporation.
Trafalgar's board meeting tomorrow will also consider Hongkong Land's continuing demand for representation on the board, despite the failure of its tender offer. The Far East company, part of the Jardine Matheson trading combine, argues that its 14.9 per cent stake - easily the largest in the company - gives it the right to representation. Allan Gormly, head of the engineering division, is likely to succeed Sir Eric as chief executive.
Under Stock Exchange rules, Hongkong Land could buy up to 25 per cent of Trafalgar next week if its tender offer fails to boost its holding.
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