Investor demands Adnams changes share structure
A row has reignited between Suffolk brewer Adnams and one of its shareholders, investment firm Guinness Peat Group (GPG).
As well as calling for better corporate communication from the brewer, GPG has for the second time in a year demanded sweeping changes to Adnams' share structure.
However the brewers' executive chairman Jonathan Adnams rejected GPG's share calls, and said the group regularly talked to shareholders.
GPG wants holders of Adnams 'A' shares to be able to convert them to 'B' shares on a one-for-four basis. This, it claims, would provide 'A' shareholders "with a real alternative to selling their holding to other 'A' shareholders", and would enable a "fair negotiation between buyer and seller".
GPG, which holds five per cent of Adnams' equity, but only 2.5 per cent of the brewer's voting shares, believes its proposals will lead to "a healthier spread of the voting power… and help to better balance the influences upon the board".
The firm's investment manager Max Lesser accused Adnams of not treating shareholders equally and of "un-commercial decision-making". In a letter to shareholders GPG described Adnams' communication concerning investment in its brewery as "woefully inadequate".
"We understand a business has to make decisions, but we feel we are being sidelined from that process," Lesser told thepublican.com. "Disclosure from the board has been poor," he added.
Lesser said roll-out plans for Adnams' Cellar & Kitchen stores - retail outlets selling food, drink and kitchen equipment - gave cause for concern and had "not been well canvassed". He added: "Core shareholders get told what's going on and tacitly approve board decisions. The rest of us get soundbites."
Adnams' Jonathan Adnams rejected GPG claims regarding poor communication. He told thepublican.com the brewer talked to shareholders via its "well attended" AGM and its annual and interim reports.
"Yes, one can always communicate better and we are open to views on how we can improve in this area," he said. He added that having polled a "significant number" of shareholders Adnams believed there was no support for GPG's share structure proposals.
A system had been put in place so shares could be traded more easily, he added, and this appeared to be working well.
Responding to GPG's criticisms about the group's brewery investment, Adnams said: "We've always been upfront about it. The infrastructure is in place and the returns will come in future years. You don't get a return from day one."
News of the bust-up came as Adnams reported turnover for the year to December 31, 2007, up 2.8 per cent at £47.4m. Operating profits rose 2.6 per cent to £4.2m, while property sales boosted pre-tax profits to £7.5m.
