Blake Nixon, UK executive director of Guinness Peat Group, which has campaigned for several years to try to get voting rights for holders of "A" shares in the south London brewer Young & Co, has put himself up for election to the Young's board.
Guinness Peat, which owns 25% of the non-voting "A" shares in Young's, says Nixon's election to the board would "provide the impetus which we feel is currently lacking for meaningful action to correct Young's inadequate return on capital, and to deliver shareholder value in a timely manner."
Guinness Peat has put forward resolutions for Young's AGM on July 16 to allow the brewer to buy back its own shares. It said: "The merit of Young repurchasing its shares, which are today selling at a 35% discount to their net asset value, versus buying fully priced assets in the open market is undeniable."
It is also attacking the Ram Brewery Trust, holder of 25.65% of the shareholder votes, which was set up as a pension fund and company profit sharing scheme. The trustees are Young's chairman, John Young, and deputy chairman, and the chairman's brother.
In a letter to John Young released on Friday, Nixon said "The scope for abuses is obvious. The effect is to magnify the deleterious nature of the current share structure under which the 'B' shareholders, whilst having the power to appoint the entire Board, only own 31.9% of the share capital and therefore are exposed to only 31.9% of the estimated £4m to £5m underperformance caused by the brewery's poor economics.
"The combination of the RBT and the share structure makes it exceedingly difficult, if not impossible, for the independent directors to ensure they can effectively represent the public shareholders, who are forced to bear 68.1% of this shortfall."
A spokesman fore Young's said Guinness Peat "is motivated by the deesire for short-term realisation of value by the break-up of the company, which the current share strucxture does not allow it to achieve."
Guinness Peat, which owns 25% of the non-voting "A" shares in Young's, says Nixon's election to the board would "provide the impetus which we feel is currently lacking for meaningful action to correct Young's inadequate return on capital, and to deliver shareholder value in a timely manner."
Guinness Peat has put forward resolutions for Young's AGM on July 16 to allow the brewer to buy back its own shares. It said: "The merit of Young repurchasing its shares, which are today selling at a 35% discount to their net asset value, versus buying fully priced assets in the open market is undeniable."
It is also attacking the Ram Brewery Trust, holder of 25.65% of the shareholder votes, which was set up as a pension fund and company profit sharing scheme. The trustees are Young's chairman, John Young, and deputy chairman, and the chairman's brother.
In a letter to John Young released on Friday, Nixon said "The scope for abuses is obvious. The effect is to magnify the deleterious nature of the current share structure under which the 'B' shareholders, whilst having the power to appoint the entire Board, only own 31.9% of the share capital and therefore are exposed to only 31.9% of the estimated £4m to £5m underperformance caused by the brewery's poor economics.
"The combination of the RBT and the share structure makes it exceedingly difficult, if not impossible, for the independent directors to ensure they can effectively represent the public shareholders, who are forced to bear 68.1% of this shortfall."
A spokesman fore Young's said Guinness Peat "is motivated by the deesire for short-term realisation of value by the break-up of the company, which the current share strucxture does not allow it to achieve."
