Flooring and wall tile retailer Topps Tiles has rejected a call from its largest shareholder to jettison former-Carpetright chief executive Darren Shapland as its chairman.
MS Galleon owns a 29.9% stake in the chain and wants two of its nominees to be directors and for Topps to abandon its product development and purchasing strategy and buy 29.9% of its products from its tile producer subsidiary Cersanit. MC Galleon is owned by Polish billionaire Michal Solowow. According to Forbes he is the world’s 411th richest person, worth more than £5bn.
In the 2021 financial year Topps bought 0.5% of its products from Cersanit.
MS Galleon voted against Shapland’s re-election at this year’s AGM, when it held a 20% stake in Topps, and has now tabled notices for the next AGM on 18 January. Since 2021 MS Galleon has told Topps it’s purchases from Cersanit should reflect the level of MS Galleon’s shareholding.
Shapland told MS Galleon that following this path would not be in shareholders’ interests as sourcing product from a wide range of suppliers on a global basis is a core part of its strategy and developing exclusive products was a key strength. Topps’ sourcing policy does not allow for more than 10% of purchases to come from any one supplier in order to avoid concentration risk.
Last year Topps requested MS Galleon to set out in writing its rationale for a seat on the board, including why an MS Galleon-appointed non-executive director would be additive to the board; why the appointment would be in the interests of all Topps shareholders, and how conflicts of interest would be managed. No proposal was received.
Topps says it has the support of other major shareholders who account for 39.1% of shares and urged shareholders to vote against the resolutions.
‘The board strongly rejects these proposals, which it believes expose a clear conflict of interest between MS Galleon’s objectives for Cersanit and the interests of all Topps shareholders. The board welcomes the support received from our other largest shareholders, who have confirmed their intention to vote against the resolutions at the AGM,’ says Shapland.
‘The board unanimously rejects these resolutions which it does not consider to be in the best interests of the company and its shareholders as a whole. In proposing a resolution to remove the chairman, who has led communications with MS Galleon on behalf of the board, MS Galleon is seeking simply to strengthen its own position,’ says Keith Down, Topps senior independent director.
