Today Findel will send shareholders notice of a general meeting that has been requisitioned by Sports Direct, who are proposing a new director (Benjamin Gardener) be added to the board of Findel.
Findel, the home shopping group, is recommending that shareholders vote against the decision.
In September Sports Direct, founded by Newcastle United owner Mike Ashley, acquired an 18.9% stake in Findel, around the same time that Findel had received an approach for sports merchandise retailer Kitbag. This was from an unnamed third party and agreed terms were subject to a contract, but there was no certainty that a deal would be reached.
Since then, the general consensus is that Sports Direct is keen to disrupt the proposed sale of Kitbag.
Today Findel has announced that the sporting goods retailer is exercising its right as a shareholder with 5% of the company share capital, requiring Findel to convene a general meeting and consider a resolution to appoint Benjamin William Gardener as a director.
In a statement released this morning, Findel gave a list of reasons behind its recommendation to vote against the decision of ‘SDI’ (Sports Direct International).
Sports Direct’s notice to Findel on the meeting related to Gardener’s appointment was served without any prior consultation with the board.
The addition of Gardener as SDI's nominee director would compromise the Board’s independence and “provide information and voice to one shareholder in preference to other shareholders.”
Findel believes that SDI see real and tangible value for itself in the company, in particular the customer database, credit offer and online fulfilment capability of Express Gifts.
The most appropriate way for SDI to gain control of the company's capabilities would be to make a fair offer for it as a whole. If that happened, it could make appointments to the Board and control the entirety of the business. It wouldn’t be in the interests of the shareholders to have a nominee director on the board.
Findel also said that it believes SDI to be a direct competitor of the Kitbag brand. Due to this conflict of interest, it wouldn’t be wise to have SDI’s nominee director on the board.
The final slam from Findel essentially outlines that Gardener “lacks the qualifications to be appointed as a director of a listed company”, citing that he is unqualified in skills, knowledge and experience, including with respect to listed company requirements and governance.
The general meeting will be held on 21 December.