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After damaging the business greatly, four months ago Stanley Gibbons’s (LSE:SGI) directors were forced into a placing and open offer. The £12.3m raised was used to repay some debt bringing it down from about £22m to £16m; to “support rationalization”, i.e. somehow get a grip of the mish-mash of businesses now owned, and; to provide working capital.
So many shares were issued (130m) at 10p that they accounted for 73.4% of total share capital. Shareholder value had been destroyed on a massive scale over three years of acquisitions.
Beggars can’t be choosers, and the directors had to accept some painful changes:
New dominant shareholders
In June 2015 fund manager Henderson held 7.78% of SGI and Fidelity had 4.96%. There were a few other institutional shareholdings of between 3.4% and 6.81%, but no dominant shareholder.
Following the placing, Henderson hold 29.16% and Fidelity 9.88%. These are now the big beasts determining the firm’s future.
The view of one bulletin board writer on hearing of Henderson’s 41m share purchase is positive, “It can only be to our advantage that a major shareholder is an institution that wants a return but not to be the owner, they should exert enough pressure on the board.”
Another important participant in the March fund-raising was Richard Griffiths (aged 49), a well-known small company investor based in Monaco. He held about 14% shortly after the issue, but, having sold some shares at considerably more than the 10p he paid, he has about 6.7%.
He was chairman and founder of Evolution Securities in 2000. During his reign Evolution was fined £0.5m by the FSA for market abuse. The FT described Mr Griffiths as a “somewhat controversial and unconventional figure in the City” (FT 19.4.2015)
Between 2003 and 2005 he was Chairman of Beeson Gregory. Naturally, he has an extensive experience of equity capital markets, corporate finance and trading.
Today, he is an “active investor”, taking stakes in many small companies and agitating for change, and a leading member of what I dub the “London Gang” now targeting Stanley Gibbons.
New directors
Henry Turcan, 42, an employee of Henderson, joined SGI’s Board May 2016. Co-founder and director of Novum Securities Stockbrokers, and before that FD Evolution Securities (are you starting to notice a pattern?).
He is an experienced corporate financier with two decades in the City, working in areas such as corporate finance advice, broking, rights issues and takeovers.
Bulletin Board comments: “With Turcan on the board it make’s Henderson’s position clear……..There might even be a Chinese buyer that will take it out at a big premium before long.” “The appointment of Turcan is the best news that stakeholders have heard for some time.”
Harry Wilson, 63, appointed non……….
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