Auction Technology Group’s largest shareholder, FitzWalter Capital, has called for the removal of the British online auction operator’s chair and a strategic review that could lead to a sale, escalating pressure on the company after its board rejected several takeover approaches earlier this year.
FitzWalter, which owns 27.2% of ATG, has proposed replacing Chair Scott Forbes with fellow director Richard Campbell-Breeden, who would oversee a review of the company’s strategic options, including a share buyback and a potential sale.
The activist investor says that ATG’s corporate structure is limiting its value, given that more than 80% of its revenue comes from the United States despite its London headquarters and UK stock market listing.
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“A principally US business is best overseen from the US … ATG is likely to be more valuable to US private equity and strategic buyers,” London-based FitzWalter said.
The campaign raises fresh questions about whether ATG’s current ownership and governance structure adequately reflects the geographic concentration of its business. It also reopens the possibility of a takeover after the company previously rejected approaches from FitzWalter on the grounds that they undervalued the business.
FitzWalter’s proposal combines a boardroom challenge with a broader review of how ATG should be owned and managed. By nominating Campbell-Breeden, an existing director, to replace Forbes, the investor is seeking a change in leadership while retaining someone already familiar with the company’s operations and governance.
The proposed strategic review would examine several routes to improving shareholder returns. A share buyback could return capital to investors and reduce the number of shares outstanding, potentially increasing earnings per share if profits remain stable. A sale, meanwhile, could allow a private equity firm or industry buyer to acquire the business and pursue changes outside the constraints of a public listing.
FitzWalter has ruled itself out as a potential bidder. It also said it would provide irrevocable undertakings to support any bidder recommended by ATG’s board, signaling its willingness to back a transaction led by another buyer.
That position separates FitzWalter’s campaign for a strategic review from a direct attempt to acquire the company itself. It also places responsibility on ATG’s board to assess whether a sale or another capital-allocation measure would offer shareholders better value than continuing as an independently listed business.
The investor’s 27.2% stake gives it significant influence, although it does not by itself guarantee that its proposed board change will succeed.
FitzWalter’s argument rests partly on the gap between ATG’s corporate base and its main revenue source. With more than 80% of sales generated in the US, the investor believes the company could attract greater interest from American private equity firms and strategic buyers if its structure and leadership better reflected its largest market.
A US-focused business may be more familiar to domestic buyers and could fit more naturally into their existing operations or investment strategies. However, the revenue split alone does not establish that relocating headquarters or changing the listing would automatically produce a higher valuation. Any buyer would also assess ATG’s growth prospects, profitability, competitive position, and the costs associated with a transaction.
The dispute therefore concerns not only geography but also the value that could be unlocked through different ownership arrangements. FitzWalter appears to believe that ATG’s public-market structure is preventing investors from fully recognizing its potential, while the company’s earlier rejection of takeover approaches indicates that its board has previously disagreed with the valuation offered.
A strategic review could provide a formal process for testing those competing assessments. It would allow the board to compare a potential sale with alternatives such as a buyback or continued investment in the existing business. The credibility of that process usually depends on the scope of the review, the independence of those overseeing it and the readiness of potential buyers to offer a price that the board and shareholders consider acceptable.
ATG shares fell as much as 2.4% to 467.8 pence in early trading on Monday before paring losses to trade 0.5% lower at 0828 GMT.
The muted recovery from the session’s low suggests investors were still assessing the implications of the campaign rather than treating a sale as imminent. A review could create an opportunity for a transaction, but it does not guarantee that a suitable buyer will emerge or that an offer will exceed the proposals previously rejected.