Shire Pharma chief to reassure investors

James Cavanaugh, chairman of Shire Pharmaceuticals, will fly into London this week to reassure analysts and investors that he wants the company to remain British and independent.

Mr Cavanaugh, who will come from the US to help present the company's third-quarter results on Wednesday, will try to calm investor nerves after the shock ousting of Shire's chief executive, Rolf Stahel, last week.

The group has yet to provide a convincing explanation for Mr Stahel's departure, which came at the instigation of Mr Cavanaugh and the other non-executive directors.

The chairman is likely to play down speculation that Mr Stahel was pushed out over a disagreement about a potential US acquisition and instead argue that the company needs another kind of chief executive to lead it to the next stage in its development. Industry sources said Mr Cavanaugh will deny that he and the other US-based non-executives want to make the company more American. Mr Stahel's resistance to this, despite the fact that 85 per cent of the company's business and most of its shareholders are in the US, was said to lie at the heart of the boardroom fall-out.

"Cavanaugh will make a commitment to Shire being a UK-based independent but with an increasing global development. He will indicate that the disagreement [with Mr Stahel] was brewing for many months," the source said.

Mr Stahel is unlikely to be replaced until next year. The non-executives believe it was less destabilising to Shire to see off Mr Stahel immediately, rather than to quietly look for a successor with him in place.