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Friday, 10 August, 2001, 16:49 GMT 17:49 UK
Claims Direct climb down
Personal injury specialist Claims Direct
Independent directors are forced to recommend its co-founders hostile bid
The battle for control over personal injury firm Claims Direct took another turn on Friday, after the company's independent directors were forced to recommend a hostile bid from its two founders Colin Poole and Tony Sullman.

Shareholders must now either reject or accept the 19.4m takeover bid.

We must reluctantly recommend that you should now accept the offer of 10p per ordinary share from Barker Securities as being a certain amount in an uncertain environment

Letter to shareholders

Mr Sullman and former chief executive Colin Poole launched a 10p a share hostile bid for Claims Direct in June.

If successful, the co-founders who stepped down in January after a profits warning, could be back at the helm once again.

Climb down

It is a turn around for Claims Direct's independent directors, who have fought the hostile takeover bid.

They have been in talks with a Simon Ware-Lane, a private investor, in an attempt to avoid a deal with Mr Sullman and Mr Poole.

They want the two founders, who currently have non-executive roles, to reduce their shareholdings in the firm.

On Thursday, Claims Direct's independent directors asked for more time to reach an alternative deal.

But Mr Poole and Mr Sullman, who own a combined 43% in the company, refused to extend the deadline, which closes on Monday.

In the absence of a new deal, independent directors said that it was necessary to restore a degree of certainty in the "absence of a more favourable alternative proposal emerging".

Ongoing talks

Negotiations with Simon Ware-Lane could take weeks to conclude.

Mr Ware-Lane already holds 4% of Claims Direct, as well as a stake in Claimline, another personal injury specialist.

David Hankinson and Paul Doona, independent directors, wrote to shareholders on Friday to urge them to accept the offer from Mr Sullman and Mr Poole's takeover vehicle Barker Securities.

It said: "We must reluctantly recommend that you should now accept the offer of 10p per ordinary share from Barker Securities as being a certain amount in an uncertain environment."

However, the acrimonious row between the company's independent directors and its co-founders is unlikely to end.

Mr Hankinson and Mr Doona said that a number of major business partners were reluctant to invest in the company while Mr Sullman and Mr Poole had "any material influence over the business".

Trouble ahead

Claims Direct has been in serious trouble, with its share price falling well below last year's 180p flotation price.

The firm's methods have always courted controversy, but adverse publicity has increased in recent months.

In July, it emerged that Claims Direct would be investigated by the Department of Trade and Industry (DTI).

But it could now face an even bigger threat to its business.

A landmark legal judgement is expected to encourage insurers to offer personal injury protection as standard, which would undermine its niche.

See also:

28 Mar 01 | Business
No respite for Claims Direct
26 Jun 01 | Business
Claims Direct losses mount
06 Aug 01 | Business
Inchcape profits up
09 Aug 01 | Business
New threat to Claims Direct
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