Tool rental firm Speedy Hire has brushed aside calls from an activist investor to oust its executive chairman and merge with a rival.
The board of the embattled firm said it should not push for a tie-up with HSS Hire and branded calls for Jan Astrand to step down as an “unnecessary distraction”.
It added that Speedy Hire’s recovery was “progressing well and to engage in any sector consolidation would potentially put that recovery at risk”.
However, it said that it believed the time was right for Astrand to return to a non-executive role.
The response came after hedge fund manger Toscafund said Astrand had “failed to deliver” during his tenure and it was in the best interest of shareholders that he resigned.
In an open letter sent on Wednesday, Toscafund – which owns 19.4 per cent of the Liverpool-based firm – said it was the first time in its 16-year history that it had decided to take action.
The letter urges Astrand to leave the company before shareholders vote on his removal and the appointment of David Shearer as director during a general meeting on 9 September.
Chief executive Martin Hughes wrote: “We believe that it would be in shareholders’ best interests if you were to resign ahead of the meeting to save both time and expense.
“You will by now be aware of the significant shareholder discontent about your track record at Speedy Hire, both in terms of governance and shareholder value creation.”
Hughes added: “The simple fact is that you have failed to deliver during your tenure as executive chairman and we do not believe you have the appropriate track record or attitude to oversee the company’s turnaround.”
Toscafund has been angered by Astrand’s resistance to a merger with HSS Hire. Shares in Speedy Hire have plunged 31 per cent over the past year after it deepened its losses and announced a string of profit warnings.