Stock Spirits loses battle against shareholder

Stock Spirits’ largest shareholder has claimed victory against the Central and Eastern European producer in an internal revolt that came to a head yesterday.

Shareholders have backed a rebel investor in Stock Spirits at the company’s AGM

During the group’s AGM on Monday 23 May, shareholders voted in favour of all proposals put forward by Western Gate Private Investments, which owns a 9.7% stake in Stock Spirits.

As such, the firm has appointed Heineken Group’s Alberto Da Ponte and PepsiCo’s Randy Pankevicz to its board of directors as non-independent non-executive directors following a campaign by Western Gate, which is run by Eurocash CEO Luis Amaral.

Stock Spirits has attempted to dissuade shareholders from voting in favour of Western Gate’s proposals, claiming they have been designed to “destabilise the business” and give “undue influence” to Eurocash – Stock Spirits’ largest customer.

However, ahead of the AGM, Western Gate received backing from two other leading Stock Spirits shareholders – Az Valor and Templeton Emerging Markets.

The group had previously cited a number of concerns with regards to Stock Spirits’ recent performance, including declining market share in Poland, an “under-performing” share price, and “spiralling” corporate costs.

After Western Gate called for a “fresh perspective” at board and management level, Chris Heath, CEO of Stock Spirits, announced his early retirement.

While Stock Spirits has now agreed to appoint Da Ponte and Pankevicz as non-independent non-executive directors since they are “not independent of Western Gate”, the group plans to name two additional independent non-executive directors.

“We welcome the appointment of both independent candidates to the Stock Spirits board and thank fellow shareholders for their support,” said Luis Amaral.

“We see no reason why the company should use company resources to appoint a further two non-executive directors in addition to the two elected today by shareholders. ISS, Glass Lewis, PIRC and Heidrick & Struggles consider Randy and Alberto to be independent.

“Today’s AGM result has delivered a clear mandate for change to address the performance and strategy issues which have been highlighted, and we would like the board’s focus to be on this.”

At the request of Western Gate, Stock Spirits will also conduct a further board level review of its M&A strategy and agreed to delay implementing any M&A projects until the strategy has been approved by shareholders.

Stock Spirits previously said this would be a “wholly unnecessary use of company resources”.