Johnston Press' share price fell precipitously to -11.4% in afternoon trading after news that activist investor, Custos Group, failed in its weekend attempt to oust the company's management.
The Edinburgh-based multimedia company fell -11.4% at 14.03 GMT. Reuters reported that investment firm, Custos Group ran by Christen Ager-Hanssen, which is the second-largest shareholder with a 12.57% stake, had four directors slated for nomination to the media company's board. However, plans were hindered by a so-called "dead-hand proxy" put.
The proxy means that only the existing board can approve a new director. Ager-Hanssen who is now delaying the move was quoted in Reuters saying, "We are now considering all type of options we have; of course we will talk to all stakeholders in the company,” said Ager-Hanssen, who is the second-largest shareholder in Johnston Press with a 12.57 percent stake. “We don’t think the board or the CEO have done anything to build up the company.”
The company reported a 30.9 percent fall in half-year adjusted pretax profit and did warn in its interim results that "trading conditions across the industry continue to be difficult, especially in classified advertising."
Ager-Hanssen told Reuters: “The board is doing no more than rearranging the deckchairs on the Titanic. They literally have no clue as to how create shareholder value.”