1st Apr 2016 10:03
LONDON (Alliance News) - The battle between housing maintenance contractor Lakehouse PLC and its founder stepped up on Friday as the company's activist investors released statements on why they are seeking to shake-up the company's board.
Lakehouse then responded later in the morning on Friday, disclosing it had met with one of the activists in March to discuss a possible board appointment.
Steve Rawlings, Lakehouse's co-founder, and Slater Investments Ltd requisitioned a general meeting of the company in March calling for the removal of three non-executive directors. A meeting on the proposals will take place on April 19.
Rawlings and Slater, together the owners of a combined stake of around 22.0% in the business, are seeking to remove Chairman Chris Geoghegan and non-executive directors Jill Ainscough and Johnathan Ford.
The requisition proposes the three are replaced by Rawlings, Ric Piper and Robert Leggett. Piper sits on the boards of recruiter Matchtech Group PLC and engineering and environmental consultancy Waterman Group PLC.
Lakehouse, in its response to the requisition in late March, said the parties behind the requisition have "not provided any information in relation to their strategic vision" for the company. It said an independent board for the company, with no significant shareholder representation "represents the best corporate governance structure" for its shareholders.
Lakehouse added that the lack of involvement Rawlings has had in the group since 2012 and track record as a director since then, plus a lack of experience on the boards of listed companies, "does not suggest that he has the necessary skill set to be able to provide a meaningful contribution."
The requisition has "caused unnecessary disruption" and uncertainty at a time when the board wants to focus on the trading operations of the company, Lakehouse said.
On Friday, Slater and Rawlings published a letter sent to Lakehouse shareholders detailing their reasons for seeking to shake-up the board.
The pair said Lakehouse's history as a public company - it listed in London in March 2015 - has been "short and disappointing", topped by a profit warning in February which wiped out more than half its market value. Slater and Rawlings said they "do not believe that the board has a firm grip on the company and its prospects."
"We believe that our three candidates for the board will bring much needed perspective, experience and energy to the company and enable it to realise its potential. We believe the proposed candidates will be able to identify quickly action that is needed and to develop, with the executives, a strategy to restore shareholder value," the pair said.
In addition, Slater and Rawlings said Lakehouse's board, in its response to the requisition, "did not address its own disastrous stewardship of Lakehouse and failed to offer any positive reasons why it deserves your support."
Lakehouse then responded to the letter published by Rawlings and Slater, saying it will respond in more detail on Monday, April 4.
In particular, it noted a reference by Slater to Lakehouse making "very different noises in private" in comparison to the attacks made against the proposed board nominees.
Lakehouse said it met with Slater on March 22 to discuss the possibility of appointing a four non-executive director to the board, in line with what Lakehouse has announced it intends to do.
Lakehouse said it considered having the meeting "sensible and appropriate in order to avoid further adverse disruption, and unnecessary cost" Lakehouse has faced as a result of the meeting requisition called by Rawlings and Slater and subsequent meeting it will hold.
In the Friday response, Lakehouse urged all its shareholders to vote against the proposals tabled by Slater and Rawlings.
Shares in Lakehouse were down 1.0% to 50.00 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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