FORMER bosses of Le Riche Group and Ann Street are heading a possible shareholder revolt on CI Traders’ proposed £51.3m. takeover of ComProp. The shareholder group, including former Le Riche chairman Christopher Lloyd and long-serving Ann Street chairman Ian Steven, is critical of the purchase of the property firm by the AIM-listed company and the way it was announced to shareholders.

They want the board members to explain themselves and are pressing independent directors, including Jersey’s former Lt-Governor Sir Michael Wilkes, to call an extraordinary general meeting to justify the move.

The group has the support of a number of significant shareholders who object to the takeover. They are now looking for more support.

‘If the board does not agree to take action, then I will see if we can get the 10% of shareholders who are needed to force an EGM,’ said Mr Lloyd, who led Le Riche for 10 years from 1988.

‘They claim they are hampered by stock market rules, but they chose to deal that way. It is time the board took some notice of the other shareholders and time the independent directors stood up for us.’

Mr Lloyd said that the local giant company should invest in trading operations, not in Guernsey property. He claimed that the ComProp deal would jeopardise the dividend to shareholders because CI Traders would have to borrow to finance the deal, without an income stream.

‘Maybe the board should use these borrowings to pay something to all the CI Traders shareholders who have seen their investment decrease,’ he said.

‘They should consult with shareholders rather than run the company as a private fiefdom as they appear to be doing.’

Mr Steven said that CI Traders’ direction had shifted without shareholder consultation.

‘I would like to think that shareholders were happy with my tenure [at Ann Street] because I always consulted with them and decisions were taken democratically. I am far from happy with this board’s high-handed attitude.’

He added that the price of the deal was too high.

‘I don’t believe that paying a premium for ComProp and then giving 15% on top is necessary.’

Sir Michael, representing the CI Traders board because of chairman Tom Scott and other directors’ links with both companies, mounted a robust defence of the proposed deal.

‘CI Traders has a large property arm yet we pay rent to ComProp at Admiral Park, which is Guernsey’s premier edge-of-Town retail development, which we think has great potential, so it makes every sense to combine ComProp’s property interests with ours,’ he said.

‘The board took the decision to bid for ComProp and then an independent committee, which I head, was asked to come up with the best deal possible.’

He said that ComProp’s portfolio was impressive but the deal took six months of tough negotiation. Shareholders had not been consulted because of stock exchange concerns about the length of time negotiations were taking.

He pointed out that the share price had strengthened since the bid was revealed.

‘CI Traders is now a very different company from when Mr Lloyd and Mr Steven were in charge and we have to abide by stock market rules,’ said Sir Michael.

‘This is not a maverick deal but one that consolidates CI Traders’ position in the Channel Islands.’