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(Sharecast News) - Ricardo has hit back at a list of demands by major shareholder Science Group, which called for a major shake-up of the board including the replacement of its chair, saying that they represent an "unwelcome intervention" at an important time for the consultancy.
Science Group, which has over the past four weeks built a 15.2% stake in the firm with the share price currently at a 15-year low, has called for the replacement of Ricardo's chair Mark Clare with an executive chair it wants to nominate. The demands also included replacing the current chair of the audit committee with its own nomination, and called for the resignation of another unspecified non-executive director.
Science Group said that, if its demands were not met, it would call for a general meeting to seek shareholder support.
However, Ricardo's board on Friday responded, saying that Science Group is "opportunistically seeking to take advantage of the company's currently low valuation". Clare called it a "backdoor attempt to gain control of the company without paying a takeover premium".
Ricardo, which is currently undergoing a simplification programme to shift the business towards environmental and energy transition solutions and reduce costs, said that the demands were an "unnecessary distraction".
Ricardo also highlighted "similarly aggressive tactics" made by Science Group in connection with its historic takeovers of TP Group and Frontier Smart Technologies, where it replaced board members prior to gaining control of the companies.
If that wasn't enough, Ricardo claimed that the measures would represent non-compliance with the UK Corporate Governance Code, which requires at least half of the board (excluding the chair) to comprise independent directors. The Code also says that chairs must be independent on appointment.
"The Ricardo board sees absolutely no merit in the demands made by Science Group and unanimously urges Ricardo shareholders to join the board in rejecting them," Clare said.
Ricardo's shares were up 6.2% at 240p following the statement, while Science Group fell 0.5% to 422.75p.
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