UK rental company Speedy Hire has rejected calls by an activist shareholder for its chairman Jan Åstrand to stand down.
The company said it recommended its other shareholders voted against this proposal at an upcoming shareholder meeting.
Toscafund Asset Management, a major shareholder in Speedy Hire, this week published an open letter to Mr Åstrand which called for his resignation before a planned shareholder vote on the issue, which is scheduled to take place on 9 September.
The letter also confirmed 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.
In its latest communication, Speedy Hire said it would not have been in the best interests of all Speedy’s shareholders to merge with HSS at that time. It said Toscafund had asked Speedy to consider a combination with HSS back in January 2015, just prior to HSS’s initial public offering.
After it concluded that this wasn’t the best strategy for all shareholders, Speedy said Toscafund continued to pressure for a merger. Following press speculation in December last year, Speedy issued a statement to refute suggestions that it was considering a combination with HSS.
“To have done otherwise, given the very preliminary nature of the previous discussions with HSS and the execution risks arising from integrating a corporate acquisition, would in the Board’s view have materially risked undermining the organic recovery plan,” it said.
But Speedy claims that Toscafund continued to push for a merger into 2016, and began agitating for the removal of Mr Åstrand when Speedy repeated its belief that a tie-up with HSS was not in the best interests of all shareholders.
“During the period between January 2016 and June 2016, funds managed by Toscafund had further increased their shareholdings in HSS and Speedy from approximately 5.4% and 18.1% to approximately 18.1% and 19.4% respectively,” Speedy said.
It also said the company’s recovery plan had stabilised the business, with lower costs revenues growing ahead of the previous year.
“As always intended, following the stabilisation of the business and strengthening of the board, Jan Åstrand will revert to the role of non-executive chairman. This he will do on 30 September, 2016, being Speedy's financial half year end,” the company said.
Speedy Hire also dismissed Tosca fund’s calls 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 its independent board of directors was supportive of Jan Åstrand remaining as chairman, and as such there was no basis for any further discussions regarding David Shearer as a potential non-executive director.