Outsourcing CEO resignation paves way for a sale of the company

Outsourcing CEO resignation paves way for a sale of the company

Long suffering shareholders of Phoenix, providers of data hosting, disaster recovery and datacentre services, drew in a deep breath on Wednesday when news that CEO David Courtley had tendered his resignation filtered through.

Forced or voluntary it lays open the very real possibility of a trade or private equity sale in the next few months.

Already rocked by poor performance and a major £14m accountancy fraud, shareholders were shocked in September to “welcome” rottweiler Martin Hughes, the driving force behind Toscafund, acquiring an 8% stake to become the group’s second-largest shareholder, behind Aberforth Partners with 16 per cent.

‘While accounting irregularities seem to happen too frequently in the technology sector, the result is that the companies get sold … Phoenix IT could follow” said Panmure Gordon analyst George O’Connor. NetStore, Horizon Technologies, Synstar and Computerland all follow the pattern.

Meantime Deloittes have resigned as auditors and been replaced by PwC, and no announcement of a replacement for Courtley has been made.

Lex expects the £116m market capitalisation business to be put up for sale before the end of this month. In today’s market conditions and with the stock now a third lower than its float price in 2004, shareholders can expect to take another cold shower.

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