Davenham rebels defeated
THE board of struggling Manchester-based finance firm Davenham Group have defeated a move by rebel shareholders to oust them.
A second general meeting of shareholders took place in Manchester on Thursday convened by Money Group chief executive Tony Murtagh, who holds more than 5% of the shares.
He had tabled two resolutions calling for the dismissal of current chairman James Kerr-Muir and group managing director Paul Burke and their replacement by former Hitachi Capital CEO David Anthony as chair and ex-Secure Trust Bank CEO Gary Jennison as managing director.
However, shareholders responsible for more than 10m shares voted against the resolutions, compared with over 7.3m who voted in favour.
Speaking to TheBusinessDesk.com, Mr Anthony described the result as “disappointing”. “Both Gary and I felt that we could have made a big contribution, and Tony has skills that he was happy to offer,” he said.
The general meeting was the second that had been called in as many months in a bid to replace Davenham’s current board with a management team that had expressed an intention to reopen parts of the business in a bid to revive some shareholder value.
Since defeating the first challenge, Davenham’s board has announced that it has entered into exclusive talks with the company’s biggest shareholder, Kingswood Property Finance, about potentially reopening parts of the business.
Previously, Davenham’s intention had been to wind down the company’s loan book and return as much money as possible to the banking syndicate.
The company issued a statement following the vote stating that it remained in exclusive taks with Kingswood and Moor Park Capital Partners about a potential restructure which will see some parts of the business reopening.
“Whilst there remains no certainty as to the outcome of these discussions, the board continues to work intensively to try to maximise the chances of a reconstruction,” it said.
“The board wishes to reiterate its view that, even if Kingswood, Moor Park Capital and the banking syndicate reach agreement on a potential restructuring of the group, it is likely that there will be no value for shareholders’ current shareholdings in Davenham”.
THe board first indicated that there would be no value left in its shares in June 2010 following an independent review by advisor Hawkpoint Partners. By November, Davenham’s outstanding loan book was valued at around £90m but it still owed more than £110m to its banking syndicate, led by Royal Bank of Scotland.
Mr Anthony said that he hoped the board would now be able to “come up with proposals for revising shareholder value,” Anthony added.
“In some respects it can be seen as a positive result as it’s stirred the board into action. If it hadn’t been done, I feel the business would have folded.”
He added that it was time to move on and that he wasn’t interested in issuing another challenge.
“As a 15% shareholder I will continue to take an interest in any future proposals and I will think very carefully about which ones to support,” he said.
