Mears Group navigates activist investor bid to oust chairman
The housing and social care provider will consider former Staffline boss Andy Hogarth for the role.
Mears Group has navigated a shareholder’s attempt to oust its chairman by agreeing to consider its proposed candidate for the role.
Activist investor Shareholder Value Management (SVM) has withdrawn a request for a general meeting to remove Bob Holt, Mears Group said on Tuesday.
However, the company, which is a provider of housing and social care, intends to find a new chairman by the end of October.
SVM wanted to replace Mr Holt with former Staffline boss Andy Hogarth, a proposal Mears Group is now considering, alongside other names.
Frankfurt-based SVM owns an 8.9% stake in Mears, and raised concerns that Mr Holt was “unable to devote sufficient time” to Mears, given that he holds 10 board seats and six chairmanships.
The board places great value on having regular dialogue with its institutional shareholders and it welcomes the considered thoughts provided Mears Group
It also argued that, as he has been at the firm for 21 years, his lack of independence has “led to sub-optimal decision-making at the board level” and is behind the share price under-performance.
In a statement, Mears Group said: “The board places great value on having regular dialogue with its institutional shareholders and it welcomes the considered thoughts provided.
“As a result of this approach, the board believes it has an excellent understanding of the views of its shareholders towards its succession plans and it is confident that this is the best way forward for all Mears’ shareholders.”
Mears has seen its shares slump 25% in the past year after it warned last August that the Grenfell Tower tragedy in London would lead to a profits hit in 2016-17 as housing clients delayed new projects while reviewing the commissioning and safety practices at their properties.
But it has said sales in its housing division have stabilised as clients restart projects in the wake of the Grenfell fire.