| Thu 5 Feb 2004, 12:00 | | Intervid and VenFin square up as family makes its |
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Intervid and VenFin square up as family makes its move
February 5, 2004
By Zobuzwe Ngobese
Durban - It was three against two as a majority of board members at Intervid yesterday recommended that shareholders vote against the Howard family's proposal to change the group's six-member board.
The recommendation follows a decision by the Howard family to call a shareholders' meeting later this month to remove chairman Bill Lambert under the Companies Act.
The Howard family, through three different trusts, owns 32.5 percent of Intervid, according to McGregor's, the investors' guide.
Their decision to remove Lambert puts them on a collision course with VenFin, another family-owned company controlled by the Ruperts in Cape Town. VenFin owns 17 percent of Intervid.
An Intervid non-executive director, Johann Pieterse, chief financial officer Wayne Jaggard and chief executive Mark Taylor, in the majority view, said the proposed changes were not in the interests of the company - the primary reason being the negative impact this might have on negotiations with financiers.
Robin Howard, a non-executive director, and James Howard, an executive director, declined to give reasons for the decision to try to remove Lambert, who was appointed to his position just three months ago with the endorsement of the Howard family.
The heart of the matter is believed to be the renegotiation of a $50 million convertible loan to Intervid from RFS Holdings, an associate of VenFin. If the renegotiation is successful, it will dilute existing shareholders and allow RFS to gain control of Intervid.
The majority of directors warned shareholders that if Lambert was removed it might also jeopardise negotiations with VenFin.
"VenFin has advised that it is opposed to changes to the board of Intervid, including the removal of ... Lambert," the directors said.
RFS holds the right to convert its loan of $50 million into Intervid shares from June 2005.
But negotiations are taking place with RFS to limit its conversion shareholding to a maximum of 65 percent of Intervid.
In addition, the directors warned that board changes could endanger talks with VenFin to underwrite a conditional rights issue, which was announced last month.
Mohil Bandulal, a portfolio manager at Sasfin Frankel Pollak, said shareholders would have to consider their voting decision against the future of the group.
"Among other things, they would have to ask themselves what is the chance of VenFin walking away should the board changes prevail," Bandulal said.
Intervid's former chief executive, Rob Le Sueur, holds the view that directors are still not totally independent.
"Take Mark Taylor for instance. He is a VenFin placement."
Intervid shares rose 15c to 55c.
