Chesterton duo in pay-off battle

THE DUO fired last week at Chesterton International are fighting for a hefty pay-off - shares in the Mayfair-based estate agent.

Former chief executive Neil List and former chief operating officer Mike Backs claiming they are owed a slice of the shares under their service contracts. Chesterton disputes their right to the stock.

Chairman Peter Brooks fired the pair for revealing, against his wishes, that there was a rival bidder in the wings on the day shareholders were sent details of a 12p-a-share offer from Mohammed Jafari-Fini, a major investor.

List and Backs are due to publish a letter explaining their actions and saying why they continue to recommend shareholders reject the Jafari-Fini bid.

The £10.2m offer has the backing of the rest of the board and the irrevocable acceptance of investors representing 41% of the stock. This includes a 10% slice held in an employee share trust. The trust holds shares for Chesterton management, and investment decisions are taken by Brooks as a joint trustee.

List and Backs believe they have been granted share options - in line with the other directors - that kick in once there is a change of control. They say a chunk of their shares would have to be paid out of the trust.

The pair also claim that the irrevocable undertakings to back the Jafari-Fini bid fall away if Chesterton receives an offer worth 10% more than his bid.

In their letter, Backs and List were also expected to claim that Brooks should have told investors that another credible bidder was stalking the company. The other party is thought to be another publicly quoted property group.

Chesterton has said it did not need to disclose the presence of another interested party because its approach was 'so preliminary it did not merit an announcement under the Takeover Code'.