Activism

MWB facing break-up pressure

A US hedge fund is demanding Richard Balfour-Lynn, chief executive of Marylebone Warwick Balfour (MWB), either break up the company or stand down from the hotel group’s board.

Mercury Real Estate Advisors has a 15.8% holding in MWB, and in a letter to the board criticised its now abandoned plans for a public offering of Vector Hospitality. Mercury said it had voted for the IPO because it was presented to shareholders as a fait accompli, but remained uncomfortable about conflicts of interest attending the deal. As well as being MWB chief executive, Balfour-Lynn is a director of Vector and chief executive of Vector’s external manager.
 

Mercury argued that the failure of Vector’s IPO was substantially the result of the market’s negative view of its “undesirably conflicted and externally advised corporate structure”.

The fund said: “We demand the company immediately pursue a broad-based auction for the portfolio … If Balfour-Lynn is not willing to operate in such an open and unbiased fashion, we believe he should be immediately terminated as chief executive officer of the company”.

July 2007