Price threatens Paperlinx with another EGM

Andrew Price has accused the Paperlinx board of being clueless and threatened to force another extraordinary general meeting if it does "anything stupid".

Price failed to overthrow chairman Harry Boon at an extraordinary general meeting (EGM) on 23 March when he secured 48.6% of the shareholder votes to Boon's 51.4%.

Price told ProPrint he would confront the board if he felt it wasn't running the company properly and then call another EGM if he wasn't satisfied with its answers.

However, he said he would immediately force an EGM if the board did "anything stupid", which he defined as selling plum assets outside continental Europe so chief executive Toby Marchant could achieve his "pie in the sky" target of returning to profitability by 2014.

Price said he was in regular contact with Paperlinx staff, customers and suppliers.

"Fundamentally it's a good business, it's just been managed badly," he said.

"I'm keeping a close eye on Paperlinx... because I haven't decided what I'm going to do yet, and considering how close the vote was it would be easy for me to challenge again."

He said he and his group controlled 8% of the company and "could just buy the extra stock" needed to win any future shareholder ballot.

Price said the board had embraced some of his ideas, such as directors buying more shares to have more 'skin in the game' and implementing one consistent brand globally.

James Orr, Paperlinx's executive general manager of corporate affairs, told ProPrint that the board had adopted those ideas before Price launched his attack in January.

The board had long wanted to buy more shares but had not been able to find any windows due to insider trading laws, while implementation of the global branding strategy had started in mid-2011, said Orr.

He also said Price was wrong to dismiss Paperlinx's financial forecasts.

"We've got a restructuring program underway which is forecast to deliver $61 million of savings by 2014," he said.

Orr said the board welcomed constructive advice from all shareholders, including Price, and would always act in the company's best interests.

Price told ProPrint his group was the third largest shareholder and so needed to be treated with respect.

"If we sold, that would be disastrous for Paperlinx's share price," he said.