In a scenario that resembles Lionsgate’s hostile takeover battle with Carl Icahn, Pinewood Shepperton Studios chairman Michael Grade has resisted a major investor’s attempts to oust him due to the studios’ poor performance.
Asset management company Crystal Amber, which has an 18% stake, singled out board chairman Grade and senior independent director Adrian Burn for the ax, saying that board renewal was “essential to improve the performance of the group,” in a release sent on the eve of the studio’s annual shareholders meeting in London on Tuesday.
After the meeting Grade said, “Our latest discussions with our other major shareholders, representing a clear majority, give us confidence that they support the board, its stewardship and strategy.”
Crystal Amber is the studio’s second largest shareholder after the Peel Group, which owns a 26.6% stake. Peel is known to back Grade. Its representive Steven Underwood was recently invited to join the board.
Profits at Pinewood Shepperton, home to the James Bond and Harry Potter franchises, have halved since the studios were floated on the stock market in 2004. Profit before tax was £4.5 million ($6.8 million) in 2009 compared to $15.2 million in 2004 — a 56% drop.
Crystal Amber, which bills itself on its website as “taking stakes in undervalued companies and taking action to enhance value,” began investing in Pinewood Shepperton 18 months ago.
Its director and investment adviser Richard Bernstein said the group had repeatedly offered proposals to the board to “enhance the perceptions of the value in the business” but felt that meetings with Grade had been “unproductive.”
He added, “We have experienced poor stewardship of shareholder interests at first hand and have regrettably come to the conclusion that he has neither the desire nor the wherewithal to deliver.”
A Pinewood spokesman said the call for Grade and Burn to step down was “never even voiced” at the shareholders’ meeting.
Grade did tell the board and shareholders that the company’s strategy has “enabled the business to withstand the difficult economic conditions of the last few years.”
He added the board was pleased to have maintained dividend payments to shareholders.
“We will continue to optimize the use of our facilities across the creative industries to enhance our studios through improvement and expansion and to add value to our unique property assets,” he said. “We are pursuing other relevant business opportunities that provide meaningful benefit to the group as appropriate.”
Bernstein added that Crystal Amber would continue to converse with other shareholders in hopes to “refresh the board.”
The Pinewood Studios Group was formed in 2000 after a management team bought Pinewood Studios in Buckinghamshire from the Rank Group and the Middlesex-based Shepperton Studios in 2001.
In 2005, it acquired London’s Teddington Studios as well as the former studios of Thames Television.
The studio has also spread its wings internationally: In February, Pinewood Studios and Germany’s Studio Hamburg formed a joint venture, dubbed Pinewood Studio Berlin Film Services, which allows international filmmakers to take advantage of joint infrastructure and services in Germany and Blighty.
A year ago, Pinewood expanded into the Canadian market and sealed a comprehensive sales and marketing deal for FilmPort, the city’s largest studio, which it rebranded Pinewood Toronto Studios. Her Majesty Queen Elizabeth II will visit Pinewood Toronto on Monday, as part of her nine-day trip to Canada.
In December, the studio facilities group pacted with Malaysia’s government to set up a studio in the country, which is expected to be completed in 2012.
The studio is currently looking to expand in Buckinghamshire under its $327 million Project Pinewood. The proposal, which aims to span 110 acres, was submitted to local planning authorities in June 2009 and refused in October due to a campaign by local residents. It is currently appealing the refusal.
“Pirates of the Caribbean: On Stranger Tides” is currently shooting at the Buckinghamshire branch.