Toscafund Asset Management, a major shareholder in UK rental company Speedy Hire, has strengthened its calls for Speedy’s chairman Jan Åstrand to step down.
In an open letter to Mr Åstrand, Toscafund chief executive Martin Hughes called for his resignation before a planned shareholder vote on the issue on 9 September.
“The simple fact is that you have failed to deliver during your tenure as executive chairman and we do not believe you have the appropriate track record or attitude to oversee the Company’s turnaround," the letter stated.
The letter went on to label Mr Åstrand ‘indecisive’, and claimed he had undermined the position of Russell Down, Speedy Hire’s chief executive.
HSS Hire deal
The letter also appeared to confirm rumours that Speedy Hire and rival UK rental company HSS Hire were in merger talks earlier this year – a story that Speedy Hire denied at the time.
“You oversaw prolonged talks with regard to a potential merger with HSS Hire Group plc, which you inexplicably halted without consultation with the shareholders. You are aware that the advisors were comfortable with £20m annual synergy benefits above and beyond cost savings that would be achieved in the ordinary course of business,” the letter said.
“The merger would have been at least 70% accretive to the annual profit of Speedy Hire and the benefits would have insulated the Company from the effects of a possible UK economic slowdown.
“The higher core earnings of an enlarged group would have also led to better net cash flow, a subsequent lower level of future indebtedness and a value added return on invested capital. However, you were aware that there was unlikely to be a role for you in the combined business.”
The letter also repeated Mr Hughes’ call for David Shearer to replace Mr Åstrand. Mr Shearer is currently chairman of Liberty Living Group, chairman of Aberdeen New Dawn Investment Trust, and senior independent director at STV Group.
Speedy said it would post a circular to shareholders on 12 August including the board's full response.