OWN CORRESPONDENT, Johannesburg | Friday 12.45pm.
A SHOWDOWN between diversified African industrial group Lonrho Africa and its largest shareholder, emerging markets fund Blakeney Management, is looming as Blakeney is vying for control of the board after accusing it of giving a dismal performance. Lonrho annouced on Thursday it has scheduled an extraordinary general meeting for December 10, at which the two firms will lock horns.
Blakeney is planning to ask shareholders to oust the firm’s three non-executive directors and vote in Blakeney chairman Miles Morland, Ladbroke chairman John Jackson and African Plantations chairman Dekel Golan.
Business Report said Blakeney argues that Lonrho Africa, which demerged from the mining interests of Lonrho in May, is failing to deliver shareholder value by operating as “an old-fashioned conglomerate”. “The brutal fact is that Lonrho Africa has underperformed,” Blakeney partner Joe Demby said.
Lonrho Africa, however, argues it has already taken important strategic steps in the six months since becoming an independent company, and deputy chairman Chris Parvin said further restructuring and disposals will be announced soon. “This is a blatantly opportunistic attempt by Blakeney to take control of Lonrho Africa by the back door and without paying shareholders a premium,” said chairman Bernard Asher. Blakeney has 9,1% of Lonrho Africa and controls a further 1% through associate Africa Lakes, a competitor to Lonrho Africa.
Lonrho Africa argues the involvement of Africa Lakes and African Plantations creates a conflict of interest since these companies operate in the same markets as Lonrho Africa.