Rebels win battle to force changes on M&B board

• M&B's chains include All Bar One. Picture: TSPL

Lewis, M&B's biggest shareholder with 22 per cent, and 17.5 per cent owner Elpida, the investment vehicle of Irish racing tycoons JP McManus and John Magnier, won enough votes at a heated AGM to install four non-executive directors. They also ousted existing chairman Simon Laffin, along with two other directors. Laffin's reappointment was rejected by a majority of 65 per cent.

Elected to the board of M&B, whose chains include All Bar One and Harvester, were former Debenhams boss John Lovering, former Scottish & Newcastle director Jeremy Blood, former Hamleys head Simon Burke, and Michael Balfour, founder of the Fitness First leisure chain.

Ed Banks, of Evercore investment bank, representing Elpida, said investors had been let down by M&B's board, including a disastrous 500 million derivatives bet and the "extraordinary step" of sacking four non-executive directors last November. These included two of Bermuda-based Piedmont's representatives.

Banks said it was "utter rubbish" to say McManus and Magnier were acting in concert with Lewis, who owns English Premiership football club Tottenham Hotspur, and to take a "spurious" complaint to the City Takeover Panel.

He said the campaign was not to take backdoor control of M&B, whose profits have steadily fallen in recent years, but to ensure that it was better run. "They don't like shareholder democracy," Banks added. "We feel the real reason (for the board's opposition to change] is that they are scared of losing their jobs."

Laffin was too inexperienced and needed to be replaced by a "heavyweight chairman", he said.

Lovering, who is expected to take that role, was elected by 84 per cent of the votes, including proxies.

Burke got a 76 per cent majority, Blood 68 per cent, and Balfour 65 per cent. There was a high 82.47 per cent voting turnout.

About 400 small shareholders in the hall in Birmingham appeared to support the existing board and rapped Piedmont for not addressing the meeting.

Shareholder Mike Fisher was applauded when he dubbed the rebel campaign, also supported by the Leo hedge fund, as "petty, pathetic personalisation".

Fisher added: "They (Piedmont] are not prepared to tell shareholders what they plan for the company. That says an awful lot about them."

Guy Jubb, corporate governance director at Standard Life Investments, confirmed that the Edinburgh-based asset manager was voting its near-2 per cent stake behind the board. Jubb said SLI had been "dismayed" by Piedmont's approach and its refusal to accept any compromise. However, Jubb said there was "clear room for improvement" in M&B's performance.

The outgoing directors said afterwards that they had taken a "principled stance" against Piedmont.