Saturday 24 August 2019

Johnston Press rejects call for vote on boardroom shake-up as ‘invalid’

Edinburgh-based Johnston said the request for an extraordinary general meeting was invalid, claiming the wrong person signed the paperwork.

Johnston Press
Johnston Press

By Holly Williams, Press Association Deputy City Editor

The Scotsman and Yorkshire Post owner Johnston Press has rejected a demand from its biggest investor for a shareholder vote on boardroom shake-up plans after claiming the paperwork submitted was “invalid”.

Christen Ager-Hanssen – whose Custos group owns a 20% stake in Johnston – earlier this week formally called for a general meeting of shareholders to vote on proposals to appoint former Scottish National Party leader Alex Salmond to the board and for two directors to be ousted.

He wants to remove chairman Camilla Rhodes and non-executive director Michael Butterworth and replace them with former first minister Mr Salmond and Steve Auckland, who previously ran regional newspaper group Local World, to spearhead an overhaul at the publisher.

But Edinburgh-based Johnston, which also owns the i newspaper and some 200 local titles, said the request for an extraordinary general meeting was invalid, claiming the wrong person signed the paperwork.

Alex Salmond

“In the event that the board receives a valid requisition request, the board will put the proposed resolution(s) to shareholders,” Johnston said.

Mr Ager-Hanssen, who owns the Swedish version of the Metro free newspaper, has led an increasingly vocal hostile campaign for a leadership change at Johnston in recent weeks.

The Norwegian activist investor had already attempted to appoint four directors to Johnston’s board last month, but the move was blocked by debt agreements stipulating that only existing board members can approve new director appointments.

Shares in Johnston surged 9% on Tuesday after Johnston confirmed Mr Ager-Hanssen’s formal request for a shareholder meeting, but were down 3% after the latest twist in the saga.

Johnston has struggled under a debt burden and plunging print advertising revenues.

But the i newspaper – which it bought from the owners of the Independent for £24 million in April last year – has been helping offset ongoing tough conditions for its traditional titles.

In September, it reported sharply narrowed half-year losses, to £10.2 million from £184 million a year earlier.

However, total revenue still fell 3.1% to £102.9 million, amid a drop in classified sales.

A source close to Johnston was dismissive of Mr Ager-Hanssen’s plans on Tuesday, saying: “The company is in the midst of a complex and important refinancing and we have the momentum with the established team to ensure further progress with the strategic review and ensure a good outcome.

“Despite dozens of tweets and interviews, Custos has not yet produced a coherent strategy or plan, which would be good to see.”

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