Activism

Photo-Me and activists reach agreement

Three directors have resigned from Photo-Me International less than a week after an activist shareholder demanded the removal of four members of the photobooth operator’s board. In return, Principle Capital Investment Trust, a 10% shareholder, has withdrawn an EGM requisition seeking the immediate cessation of the company’s strategic review. Photo-Me has agreed to Principle’s request that it make an announcement by no later than 15 August on whether the proposed sale of the company’s vending business will take place.

The directors who have stepped down are Riccardo Costi and Francois Giuntini, executives, and Francis Wahl, a non-executive. Dan David, a non-executive director and the company’s life president, is to resign at the conclusion of Photo-Me’s strategic review. The company said the resignations were to “improve corporate governance”.

Principle originally accused the then 11 member board of being unwieldy and containing six members who were either executives or – due to their history with the company – not considered independent for the purposes of the Combined Code. This, it was argued, permits an agenda to be pursued that may not be in the interests of all shareholders.

The Financial Times' Lombard (6 July) applauded this outcome, saying it is not always the case that investor activism achieves a result that benefits the whole shareholder register. Lombard said that it may not be comfortable for Photo-Me that it took a rebel to force progress, but Principle’s presence should encourage a far more active interest in the company’s future development.

August 2007