Salvesen plans under attack by investors

Opposition to radical restructuring plans at Christian Salvesen, the transport to pea processing group, grew yesterday after a meeting in Edinburgh between directors and around 50 Salvesen family shareholders.

Five board members, including the chairman, Sir Alick Rankin, and chief executive, Chris Masters, were told that plans to pay a pounds 150m special dividend represented "a loss of confidence" and was "an act of defeatism", according to Sir Gerald Elliot, a former chairman who is orchestrating a campaign against the proposals.

Sir Gerald said the plan to demerge Salvesen's Aggreko generator hire operation also came in for criticism from Gordon Tourlemain, a former managing director of the business. Mr Tourlemain, who helped build the business after its acquisition by Salvesen in the 1980s, told the meeting it could not have developed had it not been part of the group. It would continue to require capital in the future and it would be hampered as a Stock Exchange listed company if it did not have access to capital, he is reported to have said.

The company refused to comment on yesterday's meeting.

The Salvesen family, descendants of the founder of the former whaling company, still control around 37 per cent of the shares. Two family members, Andrew and Robin, who remain on the board as non-executive directors, were part of the company delegation at yesterday's meeting, which is normally a routine presentation to large private shareholders after the company announces figures.

Salvesen's announcement of the restructuring proposals last week, which came alongside a 15 per cent rise in interim profits to pounds 51.6m, was the fulfilment of a pledge to increase shareholder value after the group rejected a tentative pounds 1.1bn takeover bid by rivals Hays in the summer.

Sir Gerald described Mr Masters' presentation on the figures yesterday as "a pretty good performance", but he said the other propositions drew "very considerable opposition" from shareholders. "Throwing back money to shareholders" was seen by some as representing a loss of confidence by management, Sir Gerald said. A number said they would prefer to see the money reinvested and fears were expressed about the resulting high level of gearing, which Salvesen expects will reach 110 per cent after the pay-out.

Another meeting with family members is scheduled to take place tomorrow in London.