Signet rebels urge share action

Rebel shareholders in Signet, the debt-laden jewellery group, made a last-ditch attempt to force the board's hand yesterday ahead of Friday's emergency general meeting that will consider proposals to break up the former Ratners group.

Preference shareholders, led by the UK Active Value fund, issued an open letter to Signet chairman James McAdam, criticising the board for offering no alternative strategy to the rebels' break-up proposals. It said: "All we have seen is a vague promise to restructure the company and we believe that a reconstruction would have an adverse effect upon ordinary shareholders." The Signet board dismissed the rebels' attack as "nonsense".

The disgruntled shareholders suggested a package that would see ordinary shareholders receive 20p per share, providing Signet subsidiaries could be sold for more than £700m. They want the board to seek buyers for the subsidiaries and report back on prices that could be achieved.

The rebels look set to lose Friday's vote as several of Signet's key institutional shareholders have pledged support to the company. Flemings, Schroders and Scottish Value fund, which together account for 25 per cent of the ordinary shares, will back the company. Another 12 per cent of ordinary shareholders have also pledged support.

However, the institutions are impatient with Mr McAdam's failure to deliver the financial re-construction he has promised for so long. Peter Seabrook of Flemings said: "McAdam must come up with something. We want to know what proposals the board has."

Mr McAdam is believed to favour a reconstruction immediately after the company's banking facilities are re-negotiated in June. The UK Active Value Fund, led by Julian Treger and Brian Myerson, is seeking meetings with institutional shareholders to see if they will switch their vote. However, Flemings said yesterday that it would not agree to a meeting.

Signet is labouring under debts of £360m and has unpaid dividend arrears of £100m.