Showdown looms for investors in Victoria boardroom battle

Shareholders will vote on the appointment of three new directors and removal of its chairman Katherine Innes Ker and another non-executive director, David Garman, at the meeting on October 3.

Rebel investors, led by former directors Geoff Wilding and Alexander Anton, a descendant of the company’s founder, put forward the resolutions and claim the boardroom overhaul will improve shareholder returns.

But the company, which has a yarn-spinning factory in Holmfirth, West Yorkshire, insists the new team of directors plan to break the group up and install a lucrative incentive scheme.

Managing director Alan Bullock said: “All they want is control of the board and putting an incentive scheme in place. That’s disenfranchising the majority of shareholders.”

The proposed new directors are backed by Victoria’s largest institutional investor, the British Virgin Islands-based New Fortress Finance Holdings, which has 18.4 per cent of its shares.

Mr Anton and Mr Wilding resigned in August when an incentive scheme, which would have paid them half of any capital return after shareholders had received £3 per share, was rejected by the board. Shareholders will also vote on the appointment of a new director, Andrew Harrison.

The resolutions require the backing of a majority of voting investors.

Ms Ker recently wrote to shareholders urging them to reject the plans, and said approving the resolutions “would support the potential payment of several million pounds to a small number of individuals whether or not they do anything to create value in Victoria today”.

Mr Bullock was removed from the board, along with Australian MD Barry Poynter and two non-executives, when investors voted against their reappointment at Victoria’s recent AGM. However, he continues to run the company.

“This is not a busted wheel,” he said. “There are people’s jobs at risk. We have a clear strategy for the business to generate returns for shareholders. Do not give away your company to people who are doing nothing for it.”

However, Mr Wilding insisted boardroom change is vital to improve shareholder value.

“The simple reality is the company is underperforming,” he said. “Ultimately, this is about creating shareholder wealth.”

The former investment banker, who is a shareholder in Australian carpet retailer Flooring Brands, said under-performing assets will be “fixed or sold”, but declined to say which. “There are a number and it’s not for me to pre-judge this,” he said.

However, he insisted the accusation of “asset-stripping” is “ridiculous”. “That’s not a way to create wealth. Every business I’ve ever been involved in has been about growth.”

Mr Wilding added the company put itself up for sale, when it started and abandoned a sale process earlier this year.

He said any incentive scheme will need investor approval and meet corporate governance rules, but did not provide more details.

ISS, which advises institutional investors, urged shareholders to vote against all the resolutions. It said New Fortress “did not provide (a) sufficient business case, nor are we convinced that the proposals are in the best interest of shareholders as a whole”.

Investment in Westwood yarns

Victoria Plc’s yarn-spinning mill in Holmfirth, West Yorkshire employs 124 staff, supplying yarn to the group’s carpet making business and other carpet firms.

Managing director Alan Bullock said Victoria has “invested heavily” in the Westwood Yarns site. “We’ve probably got one of the most modern spinning for carpet yarn in the UK,” he said.

The site spins wool and synthetic materials, also blending and dyeing it. It was bought by the group in 1989.