Young's faces fight on share revamp

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The Independent Online
YOUNG & CO, the South London brewery, is heading for a showdown with Guinness Peat Group, Sir Ron Brierley's investment vehicle, after rejecting plans to reorganise its share structure.

In a circular sent out over the weekend, Young's board urges its shareholders to vote against resolutions which Guinness Peat has tabled for the group's annual general meeting on 21 July.

John Young, chairman, said the proposals are "transparently self-serving and are utterly without merit so far as the success and development of Young & Co is concerned".

GPG has tabled resolutions which, if passed, will force the company to enfranchise its non-voting shares, redeem its debenture and preference stock, and seek the authority to buy back its share capital.

However, the investment group's proposals have little chance of being passed. Roughly 60 per cent of Young's voting shares are in the hands of family members and former employees, virtually guaranteeing a victory for the board. The Young family holds four seats on the board.

Nevertheless, the annual general meeting is likely to be embarrassing for Young's, since other institutional investors, which include PDFM and Prudential, are likely to vote in favour of Guinness Peat's proposals.

A spokesman for Guinness Peat said: "The rise in Young's share price since we came up with our proposals suggests the market is favourably disposed to them. We hope the board would act in such a way to keep the share price moving in the right direction."

Young's publicly traded voting shares hit a new high of 790p on Friday, up from less than 600p a few weeks ago, on hopes that a change in share structure would unlock the company's value.

However, Young's board argues that its strategy of expanding retail outlets, investing in pubs and promoting the Young's brand, are more likely to enhance it shareholder value.

Meanwhile, GPG is also attacking Staveley, the troubled industrial group in which it holds a 13 per cent stake.

It plans to table a resolution at Staveley's AGM on July 28 forcing the company to sell off British Salt, its salt-making subsidiary, and return the cash to shareholders.