Inside Track: Imperial’s Napier under pressure as shareholders rebel

Mark Kleinman
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as been a poor week for the UK’s quoted tobacco companies. Even by the standards of a sector used to being the target of political hammerings, the suite of measures passed by MEPs on Tuesday was tough for investors to swallow: a ban on smaller packs, enlarged health warnings and new restrictions on products aimed at younger consumers.

For Bristol-based Imperial Tobacco, events in Brussels are not the only boardroom preoccupation.

Chief among them is growing shareholder unrest about the company’s strategy and a conviction that change at the top is desirable.

Alison Cooper – forgive the inappropriate metaphor for a cigarette company boss – can breathe easily, however. It is Iain Napier, Imperial’s chairman, whose tenure may be about to go up in smoke.

Chairman for nearly seven years but a board member since 2000, several large institutions believe the blame for Imperial’s anaemic share price performance can be laid at Napier’s door.

“The focus has been on marketing to drive sales, but it hasn’t worked. We want much greater emphasis on cost-cutting,” said one.

Napier, a former Taylor Woodrow chief executive, is said to be willing to bow out next year. His successor will have some bridges to mend if the shares are to regain some ground before Imperial is the recipient of serious takeover interest.

Which is the odd one out in this corporate quartet: Gala Coral, Merlin Entertainments, House of Fraser, Spire Healthcare?

If you picked Spire, you are right, but not because it is the only one of the foursome which doesn’t flog fashion garments, rollercoaster rides or punts on the 3.40 at Towcester.

Amid a torrent of companies examining fundraisings on the London equity markets – led by the other three names on that list – the private hospital operator owned by Cinven is being forced to bide its time.

Despite the best efforts of investment bankers, the private equity group has decided not to kick off a flotation until the outcome of a Competition Commission probe into private hospital provision is clear.

That may mean delaying a process until well into next year – or beyond – depending upon the authority’s judgement. That elongated exit timetable for an investment made in 2007 has undoubtedly prompted some frustration at Cinven. But it is the right decision. Buyout firms must ask themselves whether they should flog to public market investors businesses they struggle to value themselves.

Their ability to offload the remainder of their portfolios may depend on the answer.

Stick or Twist? It could be the title of a new thriller showing on Guy Hands’ Odeon and UCI cinema screens.

It is certainly a question that the Guernsey-based tycoon is wrestling with when it comes to the future of the multiplex operator he bought eight years ago. A deal to sell the chains to BC Partners and Omers, the Canadian pension funds, fell over two years ago – quicker than a John Wayne adversary in a classic Western.

Could the answer lie in Far Eastern lands instead? Media executives say Hands is again being courted by Wang Jianlin, the founder of Dalian Wanda Group and China’s richest man.

Wang has made little effort to conceal his interest in cracking the European cinema market following his $2.6bn venture into the US with AMC Entertainment last year.

Terra Firma, Hands’ firm, says there are no negotiations taking place at the moment. But if the credits don’t roll on the tycoon’s ownership of Odeon and UCI within 12 months, I’d be amazed.

Mark Kleinman is the City editor of Sky News @MarkKleinmanSky