Leeds leads rebellion at Dawson International

YORKSHIRE textile company Leeds Group has led a successful shareholder rebellion at struggling cashmere company Dawson International.

Leeds Group, whose main investor is Swedish corporate investor Peter Gyllenhammar, acquired a 28.8% stake in loss-making AIM-quoted Scottish cashmere operation Dawson International in May and had proposed that two of its representatives join the board.

Dawson’s directors opposed the move, but 75% of shareholders voted in favour of David Bolton and Jan Holmstrom taking roles as non-executive directors at the company’s annual general meeting.

Leeds Group, which has a German textile manufacturing business and also sells fabric imported from the Far East, paid almost £1m for its stake but has described the purchase as an “investment” and denied that it plans to increase its stake above the 30% threshold which would trigger it making a bid for Dawson.

Leeds Group is being advised by lawyers from Walker Morris in Leeds.

Now its representatives have joined the board, the prospect of a bid is unlikely. Mr Gyllenhammar attended the board meeting and it is believed that Dawson’s board have held talks with him over his strategy for the group.

The Dawson board had argued that the appointment of the new non-executive directors would put too much influence in the hands of Leeds Group, but industry analysts said its opposition was undermined by the fact that it had not offered replacements for retiring non-executive directors Scott Malvenan and Andrew Smith.

Mr Gyllenhammar, a non-executive director of Leeds Group, has a reputation for building stakes in under-valued Yorkshire quoted companies including Leeds Group, Yorkshire Group and Jarvis Porter.

Dawson is one of world’s leading cashmere businesses headquartered in Kinross supplying customers including Prada, Gucci, Ralph Lauren and Burberry.

The group, which made pre-tax losses of £1.6m last year, last week sold the rights to its Dorma bed linen brand for £5m to Dunelm Group which will allow it to pay off debt.

Dawson originally bought Dorma three years ago in a £9.5m deal but it suffered from declines in the mail order and independent retailing sectors.