17th May 2016 14:19
LONDON (Alliance News) - The battle between drinks distributor Stock Spirits Group PLC and its largest shareholder continued apace on Tuesday as the UK-listed firm said it plans to appoint two non-executive directors but said it does not think those new directors should be those proposed by Western Gate Private Investments Ltd.
The pair are locked in a battle over the future direction of Stock Spirits following a tough 2015 when the company saw its market share in its key Polish market slump.
Western Gate's efforts have already resulted in Chris Heath stepping down as Stock Spirits' CEO, and the investor has proposed the appointment of Alberto Da Ponte and Randy Pankevicz as non-executive directors.
Earlier on Tuesday, Stock Spirits said it has held talks with other shareholders in the weeks since Western Gate tabled its plans to shake up the board and the company's strategy and said it was "encouraged" by the discussions and support shown by these shareholders.
Having held these discussions, Stock Spirits said some shareholders wish for the board to be strengthened and, to that end, the company has decided to undertake the process of identifying two additional independent non-executive directors to the board.
Stock Spirits said it believes the plans are aligned with what Western Gate and Luis Amaral, who controls the Western Gate vehicle, have requested. Western Gate owns 9.7% of Stock Spirits.
Stock Spirits said it hoped this would satisfy Western Gate and result in the investor withdrawing its proposals for the meeting, due to take place May 23, but this has not been the case. Stock Spirits said it was "disappointed" Western Gate and Amaral have chosen not to withdraw their resolutions.
Stock Spirits said it remains opposed to Western Gate's resolution and advised shareholders to vote against the plans. The company said its board does not believe it to be in the interest of shareholders for any directors nominated by Western Gate to be appointed to the board.
Later Tuesday, Western Gate, welcomed Stock Spirits' decision to appoint new non-executive directors, saying the company had "reached a sensible conclusion in relation to the need for additional experience on the board", though it said "it is concerning that it has taken so long for this realisation to be made."
Western Gate also said it was "extremely disappointing" that Stock Spirits "continues to discredit" its largest shareholder, "without whom none of these potential changes may have taken place in the first instance given the board's reluctance to embrace change and acknowledge the challenges facing our company."
"I fail to understand the board's continued resistance to the appointment of two highly experienced, independent candidates, especially when they have now taken the time to listen to their shareholders and agreed that additional experience is required," said Luis Amaral.
Amaral added he could see no reason to withdraw the resolutions tabled by Western Gate given Stock Spirits did not put forward any names of candidates to fill the new non-executive roles and in the light of the support Western Gate said it has received from shareholders.
Stock Spirits shares were down 0.2% at 161.75 pence Tuesday. The stock is up 16% so far in 2016, though still down 14% over the past 12 months.
By Sam Unsted; [email protected]; @SamUAtAlliance
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