// Topps said MSG had misled shareholders as it seeks support in its attempt to oust the retailer’s chairman Darren Shapland
// Topps said MSG also planned to launch a retail business in the UK, which it said would be a “material conflict of interest”
Topps Tiles has accused one of its biggest shareholders of misleading other investors as its bitter boardroom battle continues.
It said that MSG had been contacting shareholders individually “with information which contradicts previous statements made directly to Topps” regarding MSG and its interest in the business.
MSG, which owns European tile manufacturer Cersanit, last month requisitioned a vote to oust Topps Tiles chairman Darren Shapland and called for two new non-executive directors to be appointed.
Topps urged shareholders to vote against the resolutions on 18 January and said it had secured the support of key investors, with more than 41% committed to vote to re-appoint Shapland.
It said: “The board believes that the proposed appointment of MSG’s non-executive directors has the primary objective of aligning Topps’ business and strategy to MSG’s commercial objectives as owner of Cersanit, a manufacturer of tiles, and is therefore not in the best interests of the company and Topps’ shareholders as a whole.
“The Topps board understands that MSG has been contacting certain Topps shareholders individually in an attempt to garner support for the requisitioned resolutions. Information provided to shareholders by MSG included a statement that it had recently discussed increasing its share of Topps’ product purchases to 5%.
“However, this statement is not an accurate representation of the entirety of those discussions and directly contradicts statements made by MSG to Topps.”
Topps Tiles, which claims that it previously rejected MSG’s proposal that it buy a greater proportion of its tiles from Cersanit, said that “on a number of occasions” the investor had directly linked its level of equity holding in company with the level of supply that it wishes Topps to source from the firm.
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It said that Lidia Wolfinger, one of the directors it wants to have a seat on Topps Tiles’ board, requested on 25 November that it source 29.9% – equal to its level of equity in the firm – of products from Ceransit.
Topps said that when it reviewed opportunities to source products from Cersanit, it frequently concluded that the supplier was “uncompetitive” when compared with other manufacturers.
The board said that “all sourcing should be conducted on an arms-length commercial basis”.
It added: “A diverse global supply chain is a key source of competitive advantage for Topps and the board believes strongly that becoming overly reliant on a single supplier is not in the best interests of the company and its shareholders as a whole. “
The retailer also flagged that it believes that MSG is planning to launch its Nexterio tile retail brand in the UK, which has more than 40 stores in Poland.
Topps Tiles said this could potentially establish a direct competitor to its business and represented a “further material conflict of interest”.
The tiles specialist said that its lack of compliance with MSG’s requests, which have extended to sourcing, its board composition, and supporting MSG’s own strategic plans for UK growth, have led its attempt to oust Shapland.
Topps highlighted that its current board was “well qualified and experienced” and had helped steer the business through the pandemic and emerge in a stronger position.
It pointed out that it had posted two consecutive record years of sales and significant market share gains.
Shapland said: “The board continues to believe that these proposals would expose shareholders to a number of serious conflicts of interest and are not therefore in the interests of all shareholders of the company.
“The board welcomes the strong support received from other large shareholders who support the board’s position in voting against the Requisitioned Resolutions at the AGM.”