Responding to demands from two shareholders to call a special meeting to vote on replacing Quarto CEO Laurence Orbach, the board of the U.K-based publisher has set the meeting for November 7. At the same time, the board reiterated that it is firmly against the proposal and urged shareholder to vote against the resolution.
The move to unseat Orbach begin in July when the Quarto board received a letter from Harwood Capital, which manages shares that represent just over 19% of Quarto’s outstanding shares, that asked for a special meeting to vote on proposals to remove Orbach as a director and to replace him on the board with Tim Chadwick. In announcing the date for the meeting, Quarto noted that Christopher Mills, Harwood’s principal, had made a tender offer to buy Quarto in 2003, an offer that was subsequently withdrawn. Since that time, Quarto said, Mills has criticized Orbach’s running of the company has “expressed his preference for appointing a nominee of his own to run the Company.”
In recommending that shareholders reject the Harwood proposal, the board stated that “during a radical period of adjustment in the book publishing industry, the Company has managed to build a successful and growing business,” under Orbach’s leadership. The board also noted that this summer Quarto had put in a succession plan to replace Orbach as CEO with the appointment of Marcus Leaver as COO, with the expectation that he would eventually replace Orbach as CEO.
In a final parting comment, Quarto said its nominations committee “does not believe that Mr. Chadwick’s past track record and achievements in the publishing industry in the UK which, according to publicly available information, were largely unsuccessful, would add anything to the good governance and running of the Company during this key succession phase, and that he would be a very poor substitute for the guiding hand of Mr. Orbach.”
