Shareholders in bamboo flooring products company Style Ltd have voted against a board shake-up brought on by major stakeholder Merim Pty Ltd in what has been called by the chairman a "cheap takeover".
Shareholders in bamboo flooring products company Style Ltd have voted against a board shake-up brought on by major stakeholder Merim Pty Ltd in what has been called by the chairman a "cheap takeover".
In a meeting this morning, Style shareholders voted overwhelmingly against Merim's bid to oust director Stephen Roux and appoint accountant Robert Stovold and investment consultant Drew Nuland to the board.
Merim is a private investment vehicle for Peter Yunghanns.
The motions were defeated by a show of hands. Earlier, chairman Greg Johnson announced proxy votes indicating overwhelming support for the board's position.
Melbourne-based Mr Roux is managing director of the RI Group Ltd, which services capital and business development requirements of emerging public and private companies in Asia, and is also a director of Stable Properties Ltd, a developer of commercial and residential projects in Melbourne and Sydney.
He has been a non-executive director of the current five member Style Board since November 2006.
"Today's vote is a ringing endorsement of our business strategy to continue with our restructuring, debt reduction and capital injection initiatives," Mr Johnson said.
"The result aborts what has been nothing more than a cheap takeover move of the Company by Mr Yunghanns' interests, through trying to seek Board control," Mr Johnson said.
"The bid has been nothing short of a diluting and unnecessary distraction that has been self serving and not in the interests of the whole of the Style shareholder register.
"In light of the clearly favorable shareholder sentiment to the current Board, management and business direction, I call on Mr Yunghanns to immediately dump his call for a second and further wasteful shareholder meeting next month at which he seeks yet another board change."
Merim has sought at that meeting, scheduled for Thursday October 23 in Perth, to remove Mr Johnson from the Board, and install Mr Yunghanns and Merim appointee, Mr Charles Gulotta.
"These are desperate measures that will do nothing but unproductively drain the finances of the Company at a time it has received market support and equity backing for its forward endeavours," Mr Johnson said.
Style's share register and capital position were significantly boosted earlier this week with the company's key North American distributor, Buckwold Western, subscribing for 14.1 million shares at $0.20 per share to inject $2.8 million into Style.
The move takes Buckwold Western's shareholding in the bamboo floor specialist to 19.05 per cent from 6.92 per cent previously and diluting Merim's holding currently to 5.92 per cent.
In addition, two major option holders, Fairmount Investments and Mr Johnson himself, have committed to exercise options at $0.20 per share by January 31 2009 to provide a further $3 million of equity capital.
Style's restructuring also includes pursuing a sale and leaseback of its wholly-owned flooring finishing factory in Anji in China to raise a further estimated $6-7 million.
Today's meeting also ratified the appointment earlier this year of director and chief executive Peter Torreele who has already completed an extensive review of the company's operations and is well advanced through completing Style's business program out to 2011.
