A battle for control of the publisher of The Scotsman and i newspapers will be ignited this week when a top shareholder unveils a plan to unseat the majority of its board – including its chief executive and finance director.
Sky News has learnt that Custos, which owns 12.6% of Johnston Press, will write to its board to demand an extraordinary general meeting at which it will seek to oust Ashley Highfield, the CEO, and David King, chief financial officer.
Christen Ager-Hanssen, who runs Custos, will also propose to replace three of the company’s non-executive directors, including Camilla Rhodes, the interim chairman.
Under Mr Ager-Hanssen’s plan, only Johnston Press’s company secretary and one of its existing non-executives would remain on the board.
In their place, the Norwegian businessman plans to nominate himself as chairman; Steve Auckland, the former Metro and Local World chief; Ash Pournouri, a music industry executive; and Michael Nouril, a partner at the law firm Mishcon de Reya.
Mr Ager-Hanssen’s plan represents an attempt to stage an audacious coup at the company behind some of Britain’s best-known newspaper brands – but which has severely underperformed in a fast-changing media industry.
Speaking to Sky News on Wednesday night, Mr Ager-Hanssen pledged that if his campaign to replace Johnston Press’s board was successful, he would “make sure that the only reward the new board will have is directly linked to the creation of significant incremental shareholder value”.
Custos’s chances of ousting the current slate of directors are strong, particularly if Johnston Press’s biggest shareholder throws its weight behind the putsch.
Insiders said on Wednesday that Crystal Amber, which owns 18% of the publisher, was likely to support Mr Ager-Hanssen.
The Norwegian tycoon, who owns Sweden’s Metro freesheet, is preparing to approach other leading investors to garner their support.
He said last week that a 2019 deadline for refinancing Johnston Press’s bonds was “hanging over [board members] like the sword of Damocles”.
“The answer to a successful debt refinancing lies in a successful equity story,” he said.
“In its fear, the board seems to have forgotten this, and as such has put the interests of shareholders behind.
“Rather than a strategic review of the refinancing or organising ad hoc bondholder committees, what Johnston Press needs is a radical shake-up of its business model – and that is what I will do.”
Mr Ager-Hanssen’s demand will come little more than a week after Alex Salmond, the former Scottish first minister and SNP leader, was linked to a potential takeover bid for The Scotsman.
Johnston Press has been struggling under a mountainous debt burden for years, and now has a stock market value of just £17.7m.
As well as The Scotsman and the i newspapers, it owns dozens of regional titles, such as the Yorkshire Post, Sussex Express and Wigan Observer.
Run by Mr Highfield, a former BBC and Microsoft executive, Johnston Press has been caught in the media maelstrom which has decimated print advertising revenues as readers choose to consume news on free digital platforms instead.
Mr Ager-Hanssen, whose stake in Johnston Press emerged in August, is thought to be planning to acquire further shares, potentially up to the 29.9% threshold, beyond which he would be required to make a takeover bid for the company.
Last week, Johnston Press said it was approaching its biggest bondholders to form a committee with which to negotiate ahead of the maturity of £220m of bonds which are due to be repaid in 2019.
“We are making good progress on our strategic review and this is an important step in moving things forward, in discussion with all our stakeholders,” Mr Highfield said.
Johnston Press could not be reached for comment on Wednesday, although a source said last week that all of its board directors had received the “firm endorsement of shareholders at May’s annual meeting, with over 99% of the vote”.
Source: Sky