Boardroom Battle Truce9 May 2011 20:24
National Express and rebel investor Elliott Advisors have reached a truce, which will prevent Elliott from challenging the company's board publicly for at least a year, sources close to the situation told Reuters.
U.S. hedge fund Elliott Advisors, the British transport group's biggest shareholder with a 17.5 percent stake, had called for a boardroom shakeup and accused the company of failing to compete for new opportunities and damaging shareholder value. Elliott said it wanted National Express investors to elect three new independent directors to push for changes at the firm at its annual general meeting (AGM) on Tuesday. However, sources close to talks between the pair on Monday said National Express would appoint former DHL UK boss Chris Muntwyler, a candidate proposed by Elliott, to its board. The sources added that Elliott would, in return, promise not to challenge National Express' board publicly for at least a year. 'The two have reached a compromise,' one source close to the talks said. 'Elliott are pleased one of their guys will be on the board and National Express have someone they rate highly.'
National Express on Friday said growing first-quarter profit showed it did not need the radical change of strategy called for by Elliott. The transport group said growth across all of its divisions had helped pretax profit grow 30 percent in the first three months of 2011.