London Capital Group – what on earth is going on behind the scenes?

The following announcement has just been made this evening via an RNS to the market –

“Pursuant to an agreement dated 2(nd) July 2014, GLIO Holdings Limited (“GLIO”) has agreed to acquire 5,000,000 ordinary shares in London Capital Group PLC (“LCG”) from Artemis Investment Management LLP at a price of 35p per share, subject to certain conditions being met, namely the passing of all shareholder resolutions proposed at the general meeting of LCG on 3(rd) July 2014 (which were in fact passed) and the grant of the Approvals (as such term is defined in LCG’s circular dated 17 June 2014). If such conditions are not satisfied by 31(st) December 2014, the agreement to purchase shall lapse.” 

At its base level, the entity that is supplying the convertible loan money to LCG – GLIO which is owned by Mr Charles Henri Sabet has entered into an off market transaction to purchase 5m shares in LCG off fund managers Artmins for 35p. It seems that GLIO felt that the vote was going to be rather closer than, in the end, (and much to my surprise I will admit) it was.

Quite why GLIO did not offer 35p to all shareholders is totally beyond me but at the very least what this does now is put a floor under any bid price for the balance stock by GLIO over the next 12 months per UKLA Takeover Panel rules should it convert. Alternately it gives an idea as to what GLIO think the stock is worth in the short term.

CLEAR DISCLOSURE – Richard Jennings and Titan funds are long LCG stock.