Guinness Peat Group Plc, the London- based investor, fired Tony Gibbs as an executive and removed him from the board after he published his personal view opposing the planned demerger of the company’s Australian unit.
The action reflected “increasing difficulties” with Gibbs and was unavoidable, Guinness Peat Chairman Ron Brierley said in a statement sent to the New Zealand stock exchange. Gibbs has been an executive director, based in New Zealand, for nearly 20 years, the company said.
Guinness Peat, which owns Coats Plc, the world’s biggest thread maker, is listed in London, Australia and New Zealand and most of its shareholders are in New Zealand. On June 16, the board unanimously agreed to create GPG Australia as a separate company and offer shares to existing investors as part of a proposal to return more value to shareholders.
The stock fell to an 11-month low on June 22 as investors objected to the plan.
Gibbs on June 25 said he had advised his board colleagues the proposal should be abandoned because it was clear it didn’t have shareholder support and wouldn’t succeed. The company should instead make a cash distribution and prepare to sell Coats, Gibbs said in a statement.
Guinness Peat was disappointed Gibbs expressed his views publicly without consulting with the board, Brierley said today. Gibbs’ alternative proposal is “inappropriate” because it ignores complexities in the Guinness Peat structure and other factors, including liabilities and tax matters that complicate the ability to make distributions, he said.
Still, the company will review the proposal and plans to appoint three, non-executive directors to be part of a board committee that will consult with shareholders and consider modifications, Brierley said.
Goldman Sachs JBWere Ltd. and Greenhill Caliburn are advising the company, it said.