John Menzies bows to investor demands for new chairman

(Adds comments by John Menzies (LSE: MNZS.L - news) , investor)

LONDON, July 19 (Reuters) - UK airport services and logistics group John Menzies has appointed Irish paper and packaging industry tycoon Dermot Smurfit as its new chairman, answering a key demand from new activist investor Shareholder Value Management (SVM).

SVM, which holds more than 7 percent of the firm, called for more independence on the company's board earlier this month when it also joined calls from other institutional investors to separate its aviation services and printed media distribution businesses.

The German activist investor complained that current interim chairman Dermot Jenkinson had connections through his wife to the Menzies family, which control about 19 percent of the company through various holdings.

Smurfit, a former deputy chairman of the family firm Jefferson Smurfit and currently chairman of Finnish-based paper and packaging group Powerflute (LSE: POWR.L - news) , will join John Menzies on July 25, the company said on Tuesday.

Jenkinson, who was appointed in May, had originally agreed to be chairman for 12 months and lead the process to appoint a successor.

Menzies has seen a high turnover among executives, with CEO Jeremy Stafford quitting in January for personal reasons and Chief Financial Officer Paula Bell resigning in April.

A John Menzies spokesman said that Dermot's appointment had been "supported by major shareholders".

Smurfit, 71, has spent over 40 years in the paper and packaging industry in which time the family business underwent a a series of changes in ownership.

Pointing to Smurfit's strong experience in merger deals, SVM analyst Gianluca Ferrari showed support for Dermot's appointment.

"We believe that Dr Smurfit brings a wealth of expertise to Menzies and are confident that he is the right person for the job ... his M&A experience will serve shareholders extremely well," Ferrari (Berlin: 2FE.BE - news) said.

Menzies has been trying to expand the aviation support business, which includes cargo and baggage handling and freight forwarding services and brings in most of its profits as its once core newspaper and magazine distribution business continues its decline. (Reporting by Esha Vaish in Bengaluru, Paul Sandle and Maiya Keidan in London; Editing by Mark Potter, Greg Mahlich)