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Last updated: May 31, 2011 7:37 am
Allan Leighton, the former boss of Asda and Royal Mail, was on Tuesday confirmed as the chairman of Pace and immediately announced a “strategic review” of the struggling UK TV set-top box manufacturer.
Mr Leighton will replace Mike McTighe, who has been chairman since 2006.
The appointment of one of the UK’s best-known businessmen, which was first reported on Sky News, could help to restore credibility at Pace, where shares lost 40 per cent of their value this month after a profits warning.
Mr Leighton has agreed to purchase £200,000 of Pace shares. The company has agreed to make a share award to match that investment on a two for one basis, vesting after three years. An additional award of more than 600,000 shares has been made and will vest dependent upon share price performance over four years: 25 per cent of this award will vest at 145p with the full amount vesting at 190p. Both awards are subject to the shares being retained until at least the fifth anniversary of his appointment.
Shares in Pace closed on Friday at 114.9p.
“I’ve watched the Pace business develop with both its ups and bumps for 15 years,” Mr Leighton said in a statement on Tuesday. “I’ve always felt there is a ‘great technology company’ in there. My task now with the management and the board is to deliver that ‘great technology company’ and the value that goes with it without the bumps. This process will start with a strategic review of the company.”
Pace overtook Motorola of the US and Technicolor of France last year to become the world’s biggest maker of television set-top boxes by shipments. However, this month the company cut back its profits forecasts for the year by £50m, blaming slow sales in Europe and the effects of the Japanese earthquake.
Only two months earlier, Pace had angered investors by failing to mention in its annual report that a key customer had deferred a large order. When news of the deferral emerged during a conference call with the company, Pace shares plunged 20 per cent, and it came under heavy criticism for communication failures.
These missteps have led some analysts to call for a management change at Pace. Neil Gaydon had been lauded as a successful chief executive, having turned round the company’s fortunes since he took over in 2006. But there is concern over how he will manage its next transition, as internet-based TV threatens to erode the set-top box market.
Troubled businesses are a speciality for Mr Leighton, who revived Asda, the supermarket group, during the 1990s, and took on the chairmanship of Royal Mail in 2002, when the company was struggling with huge losses.
Mr Leighton has recently been spending time in Canada as president of the Loblaw supermarket group.
Pace will be part of a varied portfolio of jobs for the 58-year-old, who was last week also named chairman of Peacocks, the value fashion chain.
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