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21/10/2003
Carlton Chairman bows to shareholder pressure
After days of intense speculation and boardroom wrangling Carlton Communications have confirmed that Chairman Michael Green is to stand down as Chairman designate of ITV Plc.
Mr Green will remain in position at Carlton until the completion of the long-awaited merger of the company with fellow ITV franchisee Granada, anticipated by January 2004.
The saga began on October 17 when a coalition of institutional investors, led by US based Fidelity Investments and representing some 36% of Carlton stock, wrote to the boards of Carlton and Granada to express their "firm view that an independent non-executive chairman from outside the enlarged group should be appointed Chairman designate, to take on the role of non-executive Chairman upon the merger completing. This appointment would be in substitution for Michael Green in such role."
Initially the Carlton board of directors responded robustly, unanimously refusing to remove Mr Green. In a statement issued on October 19 the board maintained that to remove Mr Green would be harmful to the merger process and that the best interests of ITV Plc lay in its management structure having "continuity and balanced representation."
Sir Brian Pitman, Senior Non-executive Director at Carlton, defended the right of the board to make such a decision in the face of shareholder opposition, saying: "This is not about individuals, this is about the role of a well-respected group of non-executive directors to determine what is in the best interests of a company and its shareholders as a whole. We are talking about a management team which has successfully fought to secure a merger of supreme strategic importance to the UK television industry and which needs every support in order to ensure that merger delivers the benefits we all expect to see."
The rebel investors would not be cowed, however, and, holding between them 33% of Granada stock, demanded that the board of Carlton's merger partner back their position.
In the face of this pressure the Granada board acquiesced and issued a statement, saying: "It is now clear to the Board of Granada that there is a substantial body of opinion, amongst shareholders of both companies, in favour of the appointment of an independent, non executive Chairman of ITV Plc.
"The Board of Granada recognises that this is a matter of corporate governance and, furthermore, is determined that ITV Plc should go forward with the full support of its shareholders; moreover, Granada is concerned that the present uncertainty should be removed as swiftly as possible. Accordingly, the Board of Granada has given careful consideration to the views of shareholders and decided that their interests will be best served by the appointment of a new Chairman from outside the enlarged ITV Plc."
Without support from the Granada board any hopes for Mr Green's survival were dashed.
Mr Charles Allen, Chief Executive of Granada and Chief Executive designate of ITV Plc remains in position, leading some analysts to comment that the merger now seems more of a Granada takeover than a marriage of equals.
(GB)
Mr Green will remain in position at Carlton until the completion of the long-awaited merger of the company with fellow ITV franchisee Granada, anticipated by January 2004.
The saga began on October 17 when a coalition of institutional investors, led by US based Fidelity Investments and representing some 36% of Carlton stock, wrote to the boards of Carlton and Granada to express their "firm view that an independent non-executive chairman from outside the enlarged group should be appointed Chairman designate, to take on the role of non-executive Chairman upon the merger completing. This appointment would be in substitution for Michael Green in such role."
Initially the Carlton board of directors responded robustly, unanimously refusing to remove Mr Green. In a statement issued on October 19 the board maintained that to remove Mr Green would be harmful to the merger process and that the best interests of ITV Plc lay in its management structure having "continuity and balanced representation."
Sir Brian Pitman, Senior Non-executive Director at Carlton, defended the right of the board to make such a decision in the face of shareholder opposition, saying: "This is not about individuals, this is about the role of a well-respected group of non-executive directors to determine what is in the best interests of a company and its shareholders as a whole. We are talking about a management team which has successfully fought to secure a merger of supreme strategic importance to the UK television industry and which needs every support in order to ensure that merger delivers the benefits we all expect to see."
The rebel investors would not be cowed, however, and, holding between them 33% of Granada stock, demanded that the board of Carlton's merger partner back their position.
In the face of this pressure the Granada board acquiesced and issued a statement, saying: "It is now clear to the Board of Granada that there is a substantial body of opinion, amongst shareholders of both companies, in favour of the appointment of an independent, non executive Chairman of ITV Plc.
"The Board of Granada recognises that this is a matter of corporate governance and, furthermore, is determined that ITV Plc should go forward with the full support of its shareholders; moreover, Granada is concerned that the present uncertainty should be removed as swiftly as possible. Accordingly, the Board of Granada has given careful consideration to the views of shareholders and decided that their interests will be best served by the appointment of a new Chairman from outside the enlarged ITV Plc."
Without support from the Granada board any hopes for Mr Green's survival were dashed.
Mr Charles Allen, Chief Executive of Granada and Chief Executive designate of ITV Plc remains in position, leading some analysts to comment that the merger now seems more of a Granada takeover than a marriage of equals.
(GB)
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