Hornby defends chairman Canham, says not in best interests to replace him

Model train maker Hornby said that it was not in the best interests of the company or its shareholders to remove chairman Roger Canham from the board and replace him with Alexander Anton.

The statement was in response to a formal request from leading shareholders to have Canham removed. Earlier this month, Anton and New Pistoia - the company's second largest shareholder - said it was time for a change after five years, during which Hornby has lost £31m.

A letter signed on behalf of ROY Nominees and HSBC Global Custody Nominee, which own about 20% of the company, called for Canham to be replaced by Anton with immediate effect, as he has "a strong track record in addressing challenging corporate issues and forcing through positive change at underperforming businesses".

However, Hornby said on Tuesday that it will urge investors to vote against the proposals at a general meeting in May. It has already received irrevocable undertakings to vote against them from Phoenix Asset Management Partners Limited, Ruffer LLP and and Downing LLP.

The company, which makes Scalextric, said the strategy currently being pursued by the board is well thought-out and is working, while the current structure and composition is consistent with good corporate governance. It also highlighted the fact that the board has the support of its majority shareholders.

At 0937 BST, the shares were flat at 32.38p.