The largest shareholder in Zytronic plc is seeking to block the solvent liquidation of the historic North East tech firm.
A boardroom battle has erupted after Tom Spain, who owns 19% of shares in the London-listed business, forced an emergency shareholder vote to appoint himself and colleague Glen Arnold as directors of the company.
Gateshead-headquartered Zytronic, a manufacturer of touch overlay sensors for interactive displays dating back to the 1940s, employs more than 100 people.
In consultation with FRP Advisory Trading Limited, it is winding down operations after considering several options including solvent liquidation or a sale following a strategic review. The company appointed a new chair in 2023 in a bid to turn around its fortunes after sales failed to recover to pre-COVID levels.
The company’s technology – manufactured in three factories in Blaydon – is used in self-service, gaming and industrial applications.
Several of Zytronic’s customers in North America had been affected by the bankruptcy of Aruze Gaming America, while wider overstocking due to supply chain concerns had also hit it hard.
Options on the table had included the implementation of a new strategic business plan, an orderly solvent liquidation of the company’s assets, the potential sale of the company, delisting and continuing as a private company, and selling the assets and continuing as a cash shell.
Solvent liquidation is when a company chooses to wind down despite holding assets valued more highly than its debt obligations.
However Spain, founder of Henry Spain Investment Services, said: “For too long, shareholder views have been disregarded and obstructed by the board, while unnecessary costs have been threatened in an attempt to resist legitimate shareholder proposals.
“We have only brought this requisition as a last resort, to protect shareholder funds and to ensure that every investor has a fair choice: either a capital return at the highest possible net asset value, or the opportunity to remain invested under renewed, transparent leadership focused on building long-term value. We look forward to presenting these proposals directly to shareholders.”
Spain cited American Warren Buffett’s Berkshire Hathaway, which began as a failing textile business and evolved into a huge investment giant.
Most of Zytronic’s assets have already been sold while trading in its shares was halted at the start of April.
This morning, confirming news of the emergency vote in a notice to the London Stock Exchange, Zytronic’s board wrote: “The board unanimously recommends shareholders VOTE AGAINST the requisitioned resolutions at the general meeting on 1st October 2025.
“The board’s approved plan is clear: liquidate assets and return ALL cash to shareholders – receiving between 48p to 58p per share (estimated).
“Tom Spain’s proposal does NOT commit to a full return of cash to all shareholders. The board believes the proposed investment alternative lacks credibility and is deficient in detail.
“In February and May 2025, the wind-down and cash return strategy was overwhelmingly approved by shareholders, including Tom Spain and Glen Arnold (as a board member). Now Tom Spain and Glen Arnold seek to change the agreed strategy.
“Requisitioning shareholders have a track record of UNDERPERFORMANCE. Every vote matters: The Board urges shareholders to participate and safeguard their returns.”
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John Walter, appointed non-executive chairman of Zytronic at the start of this month, stated: “The board’s priority is to protect the interests of all shareholders by returning all available cash following the sale of the company’s assets.
“This course of action was unanimously agreed by the board, including Glen Arnold, who was a director at the time, and received overwhelming shareholder support earlier this year. The alternative proposals put forward by Tom Spain do not, in our view, provide certainty of outcome for all shareholders and risk material loss.
“Your participation in this vote is vital, by voting against the requisitioned resolutions, you can help ensure the agreed distribution of cash to all shareholders. Please do not abstain from voting, your vote matters.”