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LONDON | Mon Oct 10, 2011 9:59am BST
LONDON (Reuters) - LMS Capital's independent non-executive directors said they were looking to replace chairman Robert Rayne, following a disagreement over strategy as Rayne seeks to break-up the investment group.
Last month, LMS (LMS.L) said it had received an approach by Rayne, along with a concert party put together by him representing approximately 35 percent of the company's shares, requesting that LMS be broken up in the short term.
However, LMS's independent directors said they had failed to reach a deal over a break-up due to price issues.
"The Independent Committee has sought to structure an exit for the Concert Party, but it has not been possible to establish a price at which the Concert Party would be willing to sell its holding and at which a buyer or buyers for those shares could be found in current market conditions," they said in a statement.
"Accordingly, Robert Rayne has been asked to resign from the board," they added.
"The company will be writing to shareholders shortly to table resolutions to approve the orderly wind-down and to address the composition of the board so as to ensure its full independence as it supervises the wind-down," said John Barnsley, who heads up the LMS Capital independent committee.
LMS Capital shares closed at 57 pence on Friday, giving the company a market capitalisation of around 155 million pounds.
Robert Rayne's late father Lord Max Rayne bought a controlling stake in LMS's predecessor London Merchant Securities in 1958.
Rayne and his partners have been concerned by the fact that the shares of LMS have traded at a discount to their net asset value since the business was demerged from London Merchant in 2006.
(Reporting by Sudip Kar-Gupta; Editing by Myles Neligan)
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