Headlam chairman Stephen Bird has responded to 10% shareholder First Seagull’s efforts to replace the board, saying ‘decisive action has been taken to address underperformance’ and it ‘recognises that recent years have been disappointing for shareholders’.
It also says it has concerns about Stian Husvaeg, First Seagull md claiming ‘attempts to introduce a current employee of a competitor as a potential NED candidate to the board [and] engagement with suppliers, competitors, customers and former employees beyond normal shareholder activity.’
First Seagull yesterday wrote to the flooring distributor calling for a general meeting at which shareholders would vote on if they wanted to replace the existing non-executive directors.
In response Bird says: ‘The board has received confirmation from the company’s two largest shareholders, representing c15% and 11% respectively of the issued share capital, that they will vote against the resolutions proposed relating to the removal of current directors and the appointment of the nominees recommended by FS at any general meeting.’
Headlam and advisor Panmure Liberum could not be contacted at the time of writing to confirm the identity of the shareholders. Its online register of major shareholders has not been updated since 25 August 2023.
‘The board recognises that recent years have been disappointing for shareholders. End‑market conditions have been challenging and mistakes have been made. The board does not seek to deflect from this reality. Importantly, since the appointment of the current chair [Bird] c12 months ago, decisive action has been taken to address underperformance, including: replacing the ceo in October 2025, with the chair stepping up as interim executive chair for a limited period whilst a new ceo was recruited and appointed; acceleration of a comprehensive transformation plan, announced in November 2025, which is already in execution and being driven by the new executive team; completing a major refinancing in February 2026 to provide liquidity and flexibility; appointing new executives, both a new ceo and a new cfo in March 2026 with Rob Barclay and Richard Jones already in situ and strengthening the Board through new non‑executive directors with relevant experience. The appointments of Nick Kelsall and Wilf Walsh will take place on 20 May 2026, having been announced in early April 2026.’
First Seagull says it supports the appointments of Barclay, Walsh and Kelsall, but the rest of the board lacks the skills to turnaround the group.
‘These actions demonstrate the level of activity undertaken and effected by your board in the most recent period, with time needed to deliver positive results. Given our shareholders have the opportunity to vote on the constitution of the board at our AGM on 20 May 2026, the distraction and cost of a separate general meeting is unhelpful and unwarranted.’
First Seagull criticised Headlam for destroying £400m of shareholder value and paying the non-executive directors a combined £1.4m.
‘The board has engaged widely and extensively with FS since it was first notified of a shareholding in the company in late November last year. The board’s engagement with FS has included face to face meetings with the chair and other members of the board and senior management, a site visit, video calls and email correspondence. In the last six months there have been a significant number of interactions. This documented record of engagement directly contradicts the assertion in FS’s notice that “constructive shareholder dialogue has been met with resistance”.
‘The only material disagreement between the board and FS concerned its request for a board seat. Further, FS has provided regular written positive feedback on the strategy, action taken, including the new NED appointments and recent progress made.
‘FS first requested a single board seat in March 2026. That request was considered carefully but the board concluded that it would not be in the interests of shareholders as a whole to proceed with that request. It has been raised on a regular basis thereafter by FS.
‘The requests of FS have shifted over time. In the requisition notice they have sought: removal of the chair, the senior independent director and another non‑executive director; the appointment of Stian Husvaeg, the md of FS, an activist fund manager and the requisitioner, with no flooring or PLC experience, as a NED; the installation of a chair candidate known to FS with no flooring or PLC experience. The board considers these requests disproportionate and destabilising, particularly given that many of the concerns raised by FS are already being addressed.
‘The board also has concerns regarding the proposed appointment of Stian Husvaeg as an NED arising from certain recent activities, including: attempts to introduce a current employee of a competitor as a potential NED candidate to the board; engagement with suppliers, competitors, customers and former employees beyond normal shareholder activity and including the making of negative comments about the board and the Headlam business, creating concern amongst important stakeholders.
‘The board remains fully committed to continued engagement with shareholders and intends to provide further detail on progress and strategy alongside the AGM on 20 May and its interim results in September. The board is confident that the recently refreshed board (including a new executive team and two new non-executive directors) has the right experience to implement the company’s strategy and turnaround, and is getting on with doing so at pace.
‘The board believes the company now requires stability, focus and execution, not further disruption and that this is the best path to restoring confidence and long‑term shareholder value.’
