Speedy Hire in shareholder plea as merger tussle continues

THE board of Merseyside-based building equipment supplier Speedy Hire has again hit back at its major shareholder Toscafund, which is trying to engineer a merger with rival firm HSS Hire.

Speedy has again urged its shareholders to vote against resolutions put forward by the fund’s boss Martin Hughes, ahead of an extraordinary general meeting next Friday (September 9).

Hughes, who is known in the City as “the Rottweiler” because of his aggressive approach to investing, had pushed for the meeting and wants Speedy executive chairman Jan Astrand to be ousted.

Speedy has already confirmed that Astrand will step down and revert to a non-executive chairman role on September 30, the end of its half year, a move it said was “always intended following the stabilisation of the business and strengthening of the board”.

It has steadfastly refused to bow to sustained pressure from Toscafund to merge with rival listed firm HSS, in which Toscafund is the second largest shareholder.

This morning the company’s board issued another letter to shareholders, pointing out inconsistencies in recent statements from Toscafund.

On July 25 Toscafund stated that it had “presented a number of papers and recommendations to Jan Åstrand” which concluded that “the only sure way to achieve adequate returns would be by way of industry consolidation” but on August 15, Toscafund then stated that it “does not believe sector consolidation is vital”.

Speedy Hire’s letter said: “The decision by the board to terminate discussions with HSS in June 2016 was taken to protect the financial recovery of the company.

“The discussions with HSS had been highly preliminary and there was no proposal made by either party, let alone discussions regarding a potential post-merger board structure.

“The independent board believes that these facts disprove Toscafund’s assertion that Jan Åstrand terminated the discussions because he was ‘aware that there was unlikely to be a role’ for him in a combined business.”

The letter also reafirmed its backing of Astrand and chief executive Russell Down.

It said: “The independent board believes that the stabilisation of, and operational and financial recovery underway at, Speedy is the direct result of the close working relationship between Jan Astrand and Russell Down.

“The board is pleased to reconfirm its previously stated support of Russell Down and his strategy for the recovery and development of the company.

“Jan Astrand and Russell Down confirm they have always had an excellent working relationship and look forward to providing stable and effective leadership through the next phase of Speedy’s recovery.”

As a further illustration of progress on the company’s recovery plan, Speedy has highlighted  that the disposal of its large mechanical plant fleet for  £14m earlier this month would further strengthen its financial position, with the proceeds being used to pay down debt. 

Speedy Hire upgraded its full-year results forecasts in July, after a decent start to the year, but it has had a long run of profit warnings and board room departures.

In May the company announced it was continuing to struggle with exceptional costs wiping out profits and plunging it into a £57.6m loss.