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Spirent Suffers Boardroom Coup

Ray Le Maistre
12/22/2006

Activist investor Sherborne Investors has achieved a boardroom coup at test equipment and OSS firm Spirent Communications plc , getting the backing it needed at this morning's Extraordinary General Meeting in London to effectively take control of the company.

Sherborne, backed by allies Artemis Investment Management Ltd. and Credit Suisse Asset Management , won majority backing for its resolutions to replace three of Spirent's eight board members -- chairman John Weston, audit committee chairman Andrew Given, and remuneration committee chairman Frederick D'Alessio -- with their representatives.

In a statement to the London Stock Exchange , Spirent said "Edward Bramson, Ian Brindle, Gerard L. Eastman Jr. and Alexander Walker have been appointed directors of the Company."

The news sent Spirent's share price up by 2.25 pence, more than 4 percent, to 57.25 pence.

Bramson, who heads up self-styled "turnaround investment firm" Sherborne, will become chairman. Sherborne prides itself on taking the reins at underperforming companies and whipping them into shape.

The coup has been brewing since mid-November, when Spirent's board first rejected Sherborne's offer to run the company. (See Spirent Repels Boardroom Coup.)

Once Sherborne had rallied some support and forced the company to call today's meeting, Spirent's board went into defensive mode, issuing statements defending its record. (See Spirent Hits Back and Spirent: Just Say No.)

In addition, two of the Spirent's other non-executive directors, Marcus Beresford and Kurt Hellstrom, said they'd quit if Sherborne was successful. The duo stuck to their word and resigned following this morning's meeting. (See Spirent Directors: Back Us or We Quit.)

That means the Spirent board currently consists of the four new Sherborne-friendly directors, non-executive director Göran Ennerfelt, and the vendor's CEO and CFO, Anders Gustafsson and Eric Hutchinson.

Now investors, staff and Spirent's customers and competitors will be waiting to see what Bramson and his team have in store for the firm, which has already undergone a significant overhaul in the past year or so, divesting non-core assets, shedding staff, and buying specialist telecom test firms. (See Spirent Stabilizes, Spirent Cuts More Jobs, Spirent Gets Imperfect, Spirent Buys Test Partner, Spirent Buys VOIP Test Firm, and Spirent Buys Wireless Test Firm.)

At the heart of Spirent's problems is its OSS business, which failed to react quickly enough to the shift by carriers towards IP networks and services. (See OSS Lapse Hits Spirent.)

Spirent is one of a number of firms competing for carrier dollars in the service assurance market. Find out more about Spirent's position in the OSS sector in our new, free report, Who Makes What: OSS .

— Ray Le Maistre, International News Editor, Light Reading

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