Activist mulls next step after failed Johnston Press
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[October 23, 2017]
By Maiya Keidan and Rahul B
BENGALURU (Reuters) - Activist
investor Custos Group is considering its next steps after discovering a
clause in a bondholder deal that hindered its attempt to oust Johnston
Press top management.
Custos Group, run by fund manager Christen Ager-Hanssen, had lined up
four directors to be nominated to the Johnston Press board before
finding out this weekend it would not be possible to proceed due to a
so-called "dead hand proxy put".
The proxy inserted into Johnston Press's bondholder agreements when it
refinanced its 220 million pound ($290 million) debt pile three years
ago means that only the existing board can approve a new director.
"We are now considering all type of options we have; of course we will
talk to all stakeholders in the company," said Ager-Hanssen, who is the
second-largest shareholder in Johnston Press with a 12.57 percent stake.
"We don't think the board or the CEO have done anything to build up the
He added that he would delay his plan to seek a management rejig at the
Shares in Johnston Press, which publishes British dailies such as the
Scotsman and i newspaper, fell more than 18 percent by midsession on
Monday after The Telegraph reported on Saturday that Ager-Hanssen had
been forced to delay a call for a shareholders' meeting.
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In August, Johnston Press reported a 30.9 percent fall in half-year
adjusted pretax profit and warned trading conditions for regional
newspapers in the UK continue to be difficult.
The newspaper industry has been hard hit in recent years as advertisers
have followed readers to online platforms, forcing print publishers,
such as Trinity Mirror and Daily Mail and General Trust, to cut costs
Johnston Press had a net debt of 203.9 million pounds at Dec. 31,
according to its latest annual report.
Last year, Crystal Amber Fund, an activist investor and largest
shareholder in Johnston Press, had offered help to the company to avoid
a poor debt restructuring deal. [nL3N1C535Q]
"Despite the speculation and press comment, at the moment, there’s no
proposal from Custos," Crystal Amber fund manager Richard Bernstein told
Reuters. "If and when there is, we’ll assess it."
In an emailed statement, Ager-Hanssen told Reuters: "The board is doing
no more than rearranging the deckchairs on the Titanic. They literally
have no clue as to how create shareholder value." He declined to say
what other options he was considering.
Johnston Press was not immediately available for comment. Its shares
were trading down 18.1 percent at 14.08p by 1220 GMT.
($1 = 0.7592 pounds)
(Reporting by Radhika Rukmangadhan and Rahul B in Bengaluru, with Maiya
Keidan in London; Editing by David Holmes)
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