Bid rumours stalk UTV as board removes McGuckian
MEDIA group UTV was thrown into chaos yesterday after the company chairman was removed by the board, prompting him and two other directors to resign. Company shares then rose the most in more than two years on speculation a bid may be made for the company.
The drama began yesterday morning when the board voted to remove John McGuckian as chairman of the company, citing his "close association with TVC", a major shareholder in UTV where Mr McGuckian is a director. Once ousted as chairman, Mr McGuckian resigned as a director as did Shane Reihill and Kevin Lagan. Mr Reihill is chairman of TVC, while Mr Lagan was the senior independent director.
News of the shake-up prompted market speculation about a possible bid for the group, sending shares to their biggest daily gain since September 2009.
UTV controls a number of radio stations in the UK and Ireland, including FM104, Q102 and TalkSport. It also holds the ITV broadcast licence for Northern Ireland.
In a statement, UTV said the board removed Mr McGuckian from the chairmanship because of concerns that he had "compromised his independence".
"A majority of the members of the board consisting of Roy Bailie, Helen Kirkpatrick, John McCann, Scott Taunton and Norman McKeown considered that Mr McGuckian's close association with TVC, a major shareholder of UTV, had compromised his independence to such an extent that they no longer considered it appropriate for him to continue as chairman." Mr McGuckian, Mr Reihill and Mr Lagan all rejected those sentiments.
In a statement, TVC said Mr Reihill resigned because of "corporate governance concerns" following the ousting of Mr McGuckian. "These concerns include the actions taken today by the executive directors and a minority of the non-executive directors of UTV, who voted to have Mr McGuckian removed as chairman.
"The majority of non-executive directors were opposed to the (move).
"The actions taken by the executive directors and a minority of non-executive directors to have the chairman removed from his position without following due process were contrary to the UK Corporate Governance Code," TVC added.
That view was echoed by Mr McGuckian and Mr Lagan.
"In so acting to remove Mr McGuckian as chairman, the board proceeded contrary to the UK Corporate Governance Code (leaving them with) no choice but to resign as non-executive directors of UTV," they said in a joint statement.
Helen Kirkpatrick, a non-executive director, has taken over as interim chairman and will begin the search for a new chairman and "at least" two non-executive directors immediately "in order to ensure that in the future the company's affairs can be conducted in accordance with the UK Corporate Governance Code and best practice for corporate governance".
In London, UTV closed 13pc higher at 135.5 pence.