LONDON Sports Direct’s board and major shareholders in the troubled British retailer held "constructive" talks as they sought to rebuild trust after a stormy annual meeting, a group representing 15 percent of the company’s shares said on Friday.
The Investor Forum, which comprises 40 asset managers, insurance companies, pension funds and endowments, said the meeting was held after Wednesday's shareholders' meeting at Sports Direct's headquarters in Shirebrook, central England.
Shares in Sports Direct were up 4.5 percent at 335 pence at 0820 GMT.
With politicians condemning Sports Direct for "Victorian" working conditions and its stock down 60 percent in a year, independent shareholders had targeted Chairman Keith Hellawell at the AGM, with most of them not backing his reappointment.
Mike Ashley, the founder of the discount sportswear chain who still holds a 55 percent stake, repeatedly apologised at the AGM for what he said were serious mistakes in the way staff were treated and he vowed to rebuild the firm.
"The focus of the meeting (chaired by the Forum) was to sort of begin re-building trust between investors and the board," Phineas Glover, senior adviser with the Investor Forum, told reporters.
He said the forum's focus is on Sports Direct's governance review.
"We're committed to work with the board. They're committed to work with us, particularly over the next three months, which is a crucial period now, we feel, for the company."
Another Sports Direct shareholders' meeting is required to re-elect the chairman in three months time.
On Wednesday, Hellawell accepted the board's request to stay on as chairman. He told the AGM he would step down next year if he did not receive the backing of independent investors.
"A common refrain in investor stewardship is: Has the company grasped the nettle? Change isn't easy in these companies, particularly when they're extremely fast growing, entrepreneurial businesses," said Glover.
"But I think Keith is going to grasp the nettle now."
(Reporting by James Davey; Editing by Hugh Lawson)