Shares in Emap dive on Arculus resignation

Investors yesterday took fright at the unexpected resignation of David Arculus as managing director of Emap, the magazines and exhibitions group. Shares in Emap dropped by 28p to 785.5p, wiping pounds 58m from its stock market value.

His decision to join United News & Media comes only months after Emap was rocked by a corporate governance row that culminated in the ousting of two non-executive directors.

At that time Sir John Hoskys, chairman, played down rumours of a rift between Mr Arculus and Robin Miller, chief executive, over who would succeed him when he retires next year. Mr Miller, tipped to succeed Sir John, said yesterday no decision had been taken over who would become chairman.

Some analysts were surprised by the sharp mark-down yesterday in the share price of Emap. The company said Mr Arculus's departure was of his own choice.

Nick Ward, an analyst at Credit Lyonnais Laing, said: "The fact that Arculus is leaving is slightly disturbing." However, he added: "But the place will not fall apart without him."

Another analyst said the move was beneficial to both companies, simplifying the management structure at Emap and bringing new expertise to United, which has expanded rapidly following last year's merger with MAI and the takeover of the Blenheim exhibitions group.

Mr Arculus joined Emap as corporate planner from the BBC in 1972 and became group managing director in 1989. One of his main contributions has been in merging the business magazines and business exhibitions divisions. He was seenas an outside candidate for the chairmanship, being more likely to move up to chief executive.

He was head-hunted for hisjob at United and his decision to leave was reported to the Emap board on Friday. His responsibilities will pass directly to the heads of the four operating divisions and he will not be replaced as managing director.

Sir John said: "We are sad to see David go, but recognise the appeal of UN&M, which includes mainstream television and newspapers, areas in which Emap does not operate."

Mr Arculus also emphasised the amicable parting. "I leave Emap in very capable hands. It's a company I admire greatly," he said.

Mr Arculus said he would be taking on a far bigger job at United, having operational responsibility for consumer publishing, broadcasting and entertainment, which accounts for almost 80 per cent of group turnover and profits.

He declined to say how much his remuneration package would be when he joins United on 7 April.

Under his charge will be UK consumer publications including Express newspapers, Exchange & Mart and Dalton's Weekly, US consumer publications - mainly free pick-up magazines -the broadcasting division and Miller Freeman, the business magazines and exhibitions group, which alone is roughly equal in size to Emap. He remains a substantial shareholder in Emap, although it was believed yesterday he would dispose of his holdings in order to further his intention of becoming a substantial shareholder in United News & Media.

The price of United jumped 16.5p to 704p.