Consultant to restart search for new institutional investors after takeover bid by Francis Ives failed
Sweett Group will attempt to entice additional institutional investors after successfully fighting off an attempted leadership coup by former chairman Francis Ives.
Chief executive Dean Webster told Building the firm had postponed its search for new institutional investors while the board fought off Ives’ attempt to retake control of the consultant, but would now relaunch that effort in June. He said it was now “back to business as usual” at the firm.
The board defeated Ives’ bid with almost four-fifths of shareholders’ votes at an extraordinary general meeting (EGM) held in central London last week.
The majority of Sweett shares are held by current or former staff, with only three known institutional investors holding stock, the firm disclosed.
The two largest institutional shareholders are Close Assett Management (8.5%) and Octopus Investors (7.9%).
The lack of institutional interest in Sweett was one of the main criticisms levelled by Ives against the board, who claimed the firm was essentially a private company rather “than a proper public company” due to the ownership levels and consequently the firm was carrying unnecessary costs. Sweett denied the charge.
Sweett’s board reached out to rebel shareholders led by Ives after quashing their attempted boardroom coup, and also requested a meeting with Ives.
My intervention was to urge shareholders to re-engage with their company
Chairman Michael Henderson told Building he would “welcome” dialogue with Ives and said the firm needed to re-engage with ex-staff shareholders, who made up 87% of the voters who opposed the board at yesterday’s EGM vote.
Henderson also confirmed he intends to retire six months later than planned at the end of Sweett’s current financial year on 31 March next year, if the extension is approved by shareholders at the company’s annual general meeting this summer.
Shareholders voted 79% against removing Henderson as chairman and 79% against appointing Ives chairman.
Ives said he was “disappointed” with the outcome but said he was “not going away”.
He said he would pull together a “shareholder action group” representing the 21% of shareholders who backed him.
His aim is to grow the group to represent 25% of the stock, giving it the voting power to defeat special resolutions, which require a three-quarters majority to pass, at general meetings.
He said: “The purpose of my intervention was to hold the board to account, but also to urge shareholders to re-engage with their company.
“My affection for the company is as strong as ever and my ambitions for its future success are undiminished. When you’ve got one in five shareholders feeling the same way, now is not the time to give up.”
Ives said he would enter dialogue with the board before considering his next move and did not rule out a further EGM requisition for a leadership vote. He said “shareholders know who they can turn to” if they are dissatisfied with the company leadership in future.
Ives thanked employee shareholders for their “courage” in supporting him against the wishes of the board.
He said the EGM was a “wake-up call” and that “things must change” at Sweett.
Henderson said finding a new chairman would be a priority for the Sweett board and nominations committee. He said it would be a “stretch of the imagination” to envisage Ives as a potential candidate for the role, given the high level of opposition to his reinstatement at the EGM vote.
He said the firm was making progress and was in the first year of a three-year strategic plan, which partly entails diversifying into sectors such as energy and infrastructure.
Sweett has experienced improved financial performance since reporting its first ever trading loss last summer. The firm returned to pre-tax profit of £1.6m in its half-year results in November.