Row at Topps Tiles escalates ahead of crunch AGM vote
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Feud at Topps Tiles escalates as retailer accuses largest shareholder MSG of sharing conflicting information ahead of AGM vote crunch
- MSG has called for the impeachment of non-executive chairman Darren Shapland
- The group has a nearly 30% stake in Topps and wants new board members
- Topps now says MSG is guilty of multiple ‘conflicts of interest’
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The feud between Topps Tiles and its largest shareholder has further escalated ahead of a major AGM vote this month.
Last month, MS Galleon GmbH, or MSG, called for the resignation of the retailer’s non-executive chairman Darren Shapland.
MSG, which has a nearly 30 percent stake in Topps Tiles, demanded that resolutions to oust Shapland and appoint two representatives as non-executive directors be included at the company’s annual general meeting on Jan. 18.
Conflict of interest: Topps Tiles has alleged that its largest shareholder, seeking to oust its chairman, has provided misleading information to shareholders
MSG has been building its position in Topps since May 2020, when it bought a 4.1 percent stake.
It also owns Cersanit, a major European tile producer, in addition to a range of interests in mainly Polish home improvement and tile retail.
Topps Tiles hit back Friday, accusing MSG of providing certain shareholders with information that contradicts previous statements directly to Topps about the link between buybacks and MSG’s equity interest in the company.
MSG allegedly told shareholders it had recently discussed increasing its share of Topps’ product purchases to 5 percent.
The FTSE All-Share group said this ‘does not accurately represent the whole of those discussions and directly contradicts MSG’s statements to Topps’.
On a number of occasions, MSG has tied the level of its equity interest in the company directly to the offering Topps wants to take from Cersanit.
To this end, as recently as November 25, 2022, one of the proposed directors, Lidia Wolfinger, requested that Topps source 29.9 percent of its tile purchases from Cersanit consistent with MSG’s interest in Topps.
It added that when looking at opportunities to buy products from Cersanit, “the frequent conclusion has been that it is not competitive as a supplier compared to other manufacturers of similar products”.
“The Board believes it is inconsistent that the proposed non-executive directors aim to increase Cersanit’s tile purchases to 29.9 percent while simultaneously acting in the best interests of all Topps shareholders.”
Topps Tiles Stock fell 2 percent to 47p after the statement.
The retailer also believes MSG is preparing to launch its Nexterio tile retail brand in the UK, potentially creating a direct competitor “which would create a further material conflict of interest.”
Keith Down, senior independent director of Topps, said: “The board of directors has unanimously rejected these resolutions, which it believes are not in the best interests of the company and its shareholders as a whole.
“MSG is seeking to remove the chairman, who has directed communications with MSG on behalf of the board, so that it can increase its control over the company.”
Topps Tiles says it has now secured further backing from major shareholders against MSG shareholders, with 41 percent committing to vote against the resolutions.