Red Sea Hotels, the Israeli group that owns 28% of Gresham Hotels, is expected to announce this morning that it has succeeded in restructuring the board.
After a noisy two-hour extraordinary general meeting yesterday, Red Sea is believed to be confident that it has secured the necessary votes to oust the chairman and remaining non-executive directors.
The official result of the poll will be announced through the stock exchange this morning.
Chairman Sean Henneberry, non-executive directors Patrick Bourke and Laura Magahy, and business development director David Bunworth may find themselves without a seat on the board.
If so, they will be replaced by Red Sea nominees Harvey Soning, a property consultant and advisor to Red Sea for over 20 years, as chairman, Red Sea chief executive Amos Pickel and former Davy Corporate Finance boss Tom Byrne.
The remaining directors are finance chief Robert Bastow, chief executive Patrick Coyle and Donal Chambers.
The vote was always going to be difficult to call as the majority of Gresham shares (excluding the Red Sea stake) are in the hands of small shareholders.
In June, Red Sea had gathered enough support to remove directors Paul McCracken, Domenico Venosi and Jerry Liston from the board. It says it wants to meet with the remaining Gresham directors and decide on a seventh independent director.
Relationships between the two sides are quite sour after months of claim and counter-claim. Earlier this week Gresham said that the cost of fighting Red Sea and holding the EGM would mean the group would miss profit targets this year.
Speaking yesterday, Donal Chambers, the senior independent Gresham director, said the group would see an upturn in business soon.
“All businesses are cyclical. Ours is. Looking ahead, 2003 weather-wise has to be better than 2002. Significant moves are planned to get more tourists into this country by air and sea. London will recover. Brussels will recover. This group has the properties in place to benefit from this. Our profits will recover,” he said.
Mr Pickel told the EGM that Red Sea wanted to restructure the board to concentrate on building shareholders’ value. It is sitting on a loss on its initial investment in Gresham.
The majority of shareholders at yesterday’s meeting seemed against Red Sea, with one shareholder saying the proposals amounted to a takeover through the “back door”.