A war of words has broken out today between the board of European drinks company Stock Spirits and its largest investor, Western Gate Private Investments.
Tensions between the board and Western Gate, which owns almost 10 per cent and is headed by Portuguese cash-and-carry tycoon Luis Amaral, reached a new high today.
Western Gate lashed out at Stock Spirits after it attempted to reach out and strike a compromise over the appointment of two non-executive directors (Neds), due to be voted on at Stock Spirits' AGM next Monday.
Stock Spirits said in a statement this afternoon that it had "carefully listened to [its] shareholders" who wanted the board to be "strengthened", and offered to launch a process to identify and appoint two new Neds to appease Amaral.
Read more: Voices grow for change at Stock Spirits' AGM
Since mid-April, Western Gate has been calling for the election of two Neds – Alberto Da Ponte and Randy Pankevicz – and for a new review of the company's European M&A strategy. The spirits firm has grappled with a duty increase in Poland, the loss of market share and management turmoil.
However, Western Gate swiftly shot down Stock Spirits' efforts to broker a new agreement.
Amaral urged investors to vote for Da Ponte and Pankevicz, and said:
I fail to understand the board’s continued resistance to the appointment of two highly experienced, independent candidates, especially when they have now taken the time to listen to their shareholders and agreed that additional experience is required. The promise of future performance is one that the company has failed to live up to historically and the company is running out of time given the continued deterioration of its performance in Poland.
The communication from Stock Spirits today has come as a surprise given I have been pushing for this type of action for months. I received a call from the chairman asking me to withdraw my resolutions only a few hours before the release of the company’s announcement, which was likely already drafted. The chairman could not put forward any names of their proposed candidates as the company had not even met with an executive search firm yet and that is simply no basis to withdraw my resolutions given the support received from other shareholders for these proposals.
Earlier today, Stock Spirits made it clear that it would not support "non-executive directors who are not independent and who lack the suitable skills and experience necessary to supplement that of the existing board".
"The board has contacted Western Gate to explain their intentions and to seek to reach agreement on the matters subject to the Western Gate Resolutions ahead of the AGM. The board is disappointed that Western Gate and Mr. Amaral have chosen not to accept the board’s proposal and have not withdrawn the Western Gate Resolutions," Stock Spirits said in a statement.
As a result of the row between the company and Western Gate, chief executive Chris Heath stepped down and took "early retirement" in late April.
So far, three influential shareholder advisory groups – Institutional Investor Services, Pensions & Investment Research Consultants and Glass Lewis – have come out in favour of dissident investor Amaral.
Today, the California State Teachers' Retirement System became the first of five investors that will announce its vote before the company's AGM to confirm it will vote for Amaral's preferred non-executive directors at the meeting on Monday.