The share purchase came less that a week after investment bank Close Brothers proposed a “boarding party”, which would replace Jarvis’ senior management team. The bank has approached Jarvis chairman Steven Norris with the proposal, and it is thought that it already has candidates in mind for the roles chief executive and finance director.
But the Close proposal is by no means a done deal. Jarvis has said that Steven Norris and the Jarvis board are in total support of the executive management team and last week Jarvis shareholders claimed that Close may be suggesting the management shake-up because it would give the bank access to advisory work. The bank has advised Jarvis in the past and is likely to benefit from any restructuring at the group.
Close also does not have a stake in the company and its credibility in the eyes of Jarvis shareholders has suffered as a result. There is also concern among shareholders that Close are planning to jettison finance director Alistair Rae just as he is about to prepare a strategic review of the business.
With Close and K Capital Partners sensing an easy kill, Jarvis is now under enormous pressure. It has largely been of its own making. Three profit warnings have been issued this year already, and its accommodation division lost £5m when it was expected to turn a profit. Luckily for Norris, Jarvis’ year-end results due next month will be after the mayoral election. If Jarvis went belly-up as Londoners went to the polls, Norris’s chances of beating Ken Livingstone would be even more slender than they are already.