Carlton Communications last night vowed to stand by its chairman Michael Green and denounced a group of institutional shareholders who had demanded he resign as chairman designate of the merged ITV company by noon tomorrow.
Carlton's non-executive directors - led by Sir Brian Pitman, the former chief executive of Lloyds TSB - threatened to resign if the shareholders press the issue. The group vented their anger at Fidelity, the institutional shareholder leading the march to unseat Mr Green, at an emergency board meeting at Carlton's Knightsbridge headquarters yesterday evening. Sir Brian said: "This is not about individuals, this is about the role of a well-respected group of non-executive directors to determine what is in the best interests of a company and its shareholders as a whole."
In one of the most brutal shareholder attacks on a company director seen in years, Anthony Bolton of Fidelity, known as the City's "quiet assassin", is leading a group representing more than a third of the combined ITV's shareholders. They are demanding that Mr Green immediately relinquish the role of chairman designate.
A single ITV company is being created from the merger of Granada and Carlton, which was cleared by the Government earlier this month. Fidelity is calling for "an independent non-executive chairman from outside the enlarged group" to be made chairman designate and have put forward John Nelson, a former investment banker at Lazards and ex-chairman of CSFB Europe.
Fidelity and its supporting shareholders - UBS Global Asset Management, Morley Fund Management, Legal & General, Isis Asset Management, Deutsche Asset Management, Standard Life Investments and Schroders - own about 36 per cent of Carlton and 33 per cent of Granada.
Their refusal to accept Mr Green bolsters Granada in the subtle power battle being waged between the two companies as the management structure of the combined ITV is planned. Few City observers believed Mr Green and Charles Allen - the Granada chairman who is to be chief executive after the merger - would be able to work alongside each other for long. The pair had a fraught relationship during the ill-fated joint venture to establish ITV Digital.
The merger of the Carlton and Granada was cleared by the Department of Trade and Industry subject to undertakings on how advertising sales will be conducted. Carlton directors are furious with Fidelity for mounting their challenge during a period of sensitive negotiations over the merger conditions. One City source said: "They think Fidelity has behaved in an incredible way. The feeling is; who is this guy Anthony Bolton and what are his credentials?"
So incensed are Carlton's non-executive directors by the demand that they are prepared to resign en masse if the shareholders forced an extraordinary meeting to oust Mr Green.
As well as Sir Brian, the senior non-executive on the Carlton board, they include Sir Sydney Lipworth, the former chairman of the Monopolies and Mergers Commission, and John McGrath, the former chief executive of Diageo and the former chairman of Boots.
"If Fidelity persist in behaving like this ... they're basically forcing these guys [the non-executive directors] into a position where they'll have to resign," said the source. "They're being presented with this candidate, John Nelson, who they don't really think is the right way to go."
Fidelity wrote to Carlton and Granada twice last week to demand an independent non-executive chairman "in substitution for Michael Green" and set a deadline of midday tomorrow to comply. It said: "Failing receipt of satisfactory undertakings from both companies we will ... give consideration to all other measures open to us to ensure compliance with our letter."Reuse content