Resolution expected over GPG directors' stand-off

A tense stand-off between the board and shareholders of investment company Guinness Peat Group (GPG) may be heading for resolution in a deal foreshadowing an end to the chairmanship of its influential leader Sir Ron Brierley.

The exact shape of an agreement is not clear, but it is likely to involve the appointment of four new independent directors, three of them New Zealanders and one understood to be well-regarded Australian Mark Johnson, former deputy chairman of Macquarie Bank.

BusinessDay understands Sir Ron, who turned 73 last month, may step down as chairman once a successor is identified among the four independents, perhaps in the next six months.

To give independent directors a majority on the board, one of the four current directors – Sir Ron, Gary Weiss, Blake Nixon and Ron Langley – would have to resign, with the last said most likely to go.

Although agreement is close, investors are not jumping to conclusions after GPG's announcement on August 26 that it would appoint three new directors, not four as shareholders demanded.

"I'm certainly hopeful of a reasonable outcome," one said. "But I don't take anything for granted."

Talks between key institutional shareholders and GPG's board have been continuing for some time as investors became increasingly dissatisfied with GPG's performance and the board's efforts to turn the company around.

The dispute came to a head in June over a plan to spin off Australian assets under the management of Dr Weiss.

Seen as self-serving by institutions, it led to the departure of New Zealand executive director Tony Gibbs after he publicly broke ranks with the board.

- © Fairfax NZ News