A bitter row at the heart of one of the Midlands’ oldest carpet makers has escalated over claims an incentive scheme would make a group of shareholders £12 million – but only if the business is broken up.
Alan Bullock, managing director of Victoria Carpets, said a plan by a group led by Alexander Anton, the great-grandson of its founder, could put the future of the 117-year-old company under threat.
The row has split the Anton family, with cousins backing different factions ahead of a key general meeting.
The Kidderminster company has been locked in a boardroom battle for months, and the latest dispute surrounds plans which would see Mr Anton and others receive a “substantial share” of returns made to shareholders, which Mr Bullock described as “morally indefensible”.
He said they were attempting to seize control of the board to take advantage of the fact its net asset value is almost double its market capitalisation – meaning they could make as much as £12 million, but only, he believes, by selling or breaking up the business.
But Mr Anton has hit back, telling the Post he had the support of two-thirds of shareholders, including Anton family members who had devoted their lives to the firm.
Mr Anton, who recently resigned as a non-executive director, has called a general meeting along with the rest of his consortium to install himself as a director, and said he was acting to make changes to a management team that had failed to make the UK operation consistently profitable.
Speaking of the plans outlined by the consortium when they were still on Victoria’s board, Mr Bullock said: “Their strategy was to break up the business and sell it off.
“The only way they could return £3 to shareholders would be to sell off the Australian business and return to sell off the UK business.”
He added: “They actually invited me to be part of this scheme and I said I am not interested and I can’t be bought, even for £1 million. They were offering me a 10 per cent share.
“I think it is morally indefensible for non-executives to receive remuneration in that way and I don’t agree with breaking up a business that has been in existence for 117 years and employs hundreds of people in Australia.
“It would be against all my conscience,” he added. “I have worked here for over 40 years. I love and care for this company and I can’t sit by and help these people break up the company that I love.”
Mr Anton, along with Geoff Wilding and Sir Bryan Nicholson, resigned from the board in March, six months after their consortium won a vote that saw them installed as non-executive directors.
Mr Bullock said that in the first meeting after the previous takeover the trio proposed they would return £3 per share to shareholders and keep 50 per cent of any additional value created.
He said he would personally stand to make £1 million under the plans but branded them ‘morally wrong’.
The group, who are backed by institutional investor New Fortress Finance Holding are now seeking to oust chairman Katherine Innes Ker – who they installed after ousting the preivious chairman – as well as non-executive directors David Garman and Roger Hoyle as they seek to take control again.
Mr Bullock is appealing to smaller shareholders, many of whom would not be sent the circular because they bought through stockbrokers, to exercise their right to vote.
He said he would step down from his role if Alexander Anton’s consortium won the vote at the next general meeting – and the decision could rest on some members of the Anton family with a significant shareholding.
He said the move would threaten 200 jobs directly in Kidderminster, as well as more than 100 in Yorkshire and 300 in Australia.
He said: “They are putting the company’s future at risk because they are destabilising the company. They wish to impose their will again and despite the fact they couldn’t have this incentive package they are prepared to remove directors to do it.
“This is all about the difference between Victoria Carpets’ net asset value which is £5.80 a share and the current market capitalisation which is about £2.45 a share.
“They have identified hidden value and they thought they can access that value by controlling the company and taking that shareholder value away.
“They have not created any of that wealth, that has been created by a succession of directors over years who have run a successful business.”
He added: “It could potentially affect every employee who works here. I am not saying that it would for certain, but if the company was sold off it would likely be to a rival which would likely mean job losses and if it would be broken up it could mean job losses for everyone here.”
Alexander Anton said his consortium had already shown it has the support of shareholders after it won 67 per cent of votes at the last general meeting.
He said he was motivated by making a change to improve the return to shareholders and improve the management of the business.
Speaking of Mr Bullock, he said: “It is a bit rich coming from the man who has run the business for the last 16 years, and the UK business has never made a consistent profit over the last 10 years and has been supported by the Australian business,” he said.
He also criticised Mr Bullock for not putting in place a succession plan after his expected date of retirement next March.
He said the three executive directors of the company had taken 20 per cent more out of the business than dividends paid to shareholders in the last three years.
Mr Anton said the incentive agreements were initially discussed with shareholders and agreed.
He said the plans have the backing of members of the Anton family who would not be at ease with job losses in Kidderminster.
He said: “The business was started by my great-grandfather. There are four uncles of my father’s age who have put their whole lives into the business. To suggest they would be fast and loose with the jobs of the employees is unfair and scare-mongering.”
He added: “At the end of the day the business is run on behalf of the shareholders.
“No assets can be sold out of the business without the agreement of the shareholders.
“We have the backing of shareholders and won’t do anything without shareholder support.”
Rupert Anton, who is also a descendent of the founder and who disagrees with the plans along with parents Peter and Jane, said would stand to earn £1 million from the sale, but does not want to see the business broken up.
He said: “This is not a business that is in trouble. It is a business that is going very well despite the climate out there.
“Of all the Antons I am the one with the closest connection to the carpet industry so I know how well we are performing and that we have a customer base that is the envy of the industry,
“A lot of business in the carpet industry is done through personal relationships and we can’t afford to lose people like Alan.”