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THE
founder of an investment firm based in London is calling
for the ouster of Manuel V. Pangilinan, First Pacific
Co. chief executive officer (CEO) and managing director.
Jeremy
Hosking of Marathon Asset Management, which holds
approximately 6 percent of First Pacific’s share capital
on behalf of its clients, urged shareholders of the Hong
Kong conglomerate to vote against the reelection of
Pangilinan at the June 1 annual general meeting of First
Pacific.
“Mr.
Pangilinan is a loyal and long-standing CEO of First
Pacific. However, we have become convinced that he is
not just the right person to take the firm through the
next several years due to his determination to pursue an
acquisition-oriented strategy as a means of boosting
firm value and lowering the share price discount,” said
Hosking in a letter to the shareholders. The letter was
posted by First Pacific at the Hong Kong Stock Exchange.
In his
reply, First Pacific chairman Anthoni Salim said
Pangilinan should continue serving as CEO of First
Pacific. “Mr. Pangilinan and his team have been
instrumental in achieving the considerable enhancement
in value and performance demonstrated by the company
that has benefited all shareholders. The Board has full
confidence in Mr. Pangilinan and continuation of that
confidence will, as it has been in the past, be based
on the achievement of clear and objective performance
benchmarks set for the company, the CEO and the
management team on behalf of the company’s
shareholders.”
Hosking
argued that shareholders will benefit more if the
company deploys its resources in purchasing its own
shares, a strategy which, he said, would raise the
per-share value.
“For
over four years, Marathon has argued that share buybacks
should be part of the corporate tool-kit. However, such
discussions have been rebuffed in a most cursory manner,
and not because of any legitimate wishes of the
controlling shareholders. Rather management, in the form
of Mr. Pangilinan, has argued that share buybacks would
be ineffective in serving the owners’ interest,” said
Hosking.
Salim
said the board does not agree with the proposals of
Hosking. Though the board is open to considering all
potential options, including the option of share
buybacks, he said the board has determined that the best
course of action to increase long-term shareholder value
is a continuation of the current strategy for growth.
The
board , he added, has no current plans to issue
additional shares in First Pacific. |
