Money Printer De La Rue Calls Activist Proposals ‘Destabilizing’

(Bloomberg) -- De La Rue, the more than 200-year-old bank note and passport printer, has described activist shareholder Crystal Amber Fund’s proposals ahead of its shareholder meeting next week as “precipitous and destabilizing.”

Crystal Amber’s demand for Chairman Philip Rogerson to stand down at the July 25 meeting isn’t in the best interests of the company or its shareholders, the company said in a statement on Tuesday.

De La Rue, which announced in May that Chief Executive Officer Martin Sutherland planned to leave, said that a succession plan is in place for the chairman, senior independent director and CEO roles. Rogerson has said he’ll step down after a new CEO is found and integrated, or after a replacement chairman is found, the company said Tuesday.

Crystal Amber sent a letter asking De La Rue to oust the chairman because “he would not talk to an industry player who wants to speak to him about consolidation in the sector,” the activist’s founder Richard Bernstein said.

“It is remarkable that De La Rue wishes to use this attack on a top-three shareholder to disclose to market participants that it refused to enter into discussions with a potential corporate acquirer,” Bernstein said in an email. “No wonder shareholders have lost more than half a billion pounds since Philip Rogerson became chairman.”

Strategic Merit

De La Rue said that while Crystal Amber did approach the company about a potential acquirer, the other company never responded to an email. The firm also said it had evaluated two acquisition targets, but “concluded that they were of no strategic merit” and that Bernstein had disclosed a personal interest in one of them. That target’s shares lost more than 90% of their value while De La Rue was evaluating it, the company said.

A significant part of the second target’s business was “entirely unrelated to De La Rue’s current operations or any planned growth area,” the company said.

The activist has also urged the company to sell its banknote printing business, its main asset, saying it could fetch about 400 million pounds ($496 million). Crystal Amber owns about 6.4% of De La Rue shares, according to data compiled by Bloomberg. De La Rue’s entire market value is about 305 million pounds.

To contact the reporter on this story: David Hellier in London at dhellier@bloomberg.net

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Amy Thomson, Matthew Monks

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