ShareSoc urges shareholders to vote against Lighthouse Group delisting
ShareSoc has criticised the planned delisting of Lighthouse Group shares and urges all shareholders to vote against the resolution at the forthcoming EGM. Delisting is severely detrimental to smaller shareholders and the Company has offered no exit. As is common with AIM delistings, there was a sharp fall of 50% in the share price following the announcement as few people wish to hold shares for which there is no public and liquid market.
ShareSoc is not always against delisting if there are good reasons and an exit is provided to those who cannot or do not want to hold unlisted shares. For example, an exit by way of a tender or other offer for their shares. This gives a shareholder a choice as to whether to continue to hold the company or not. Lighthouse Group has given no such option and the Board also states it has not made any attempt yet to arrange even a matched bargain facility.
The Board has failed to persuade shareholders and the market that there are sufficient commercial and financial reasons for the delisting, otherwise the share price would not have halved and there would not be so much opposition from shareholders to the proposal.
It is noted that the Circular to Shareholders states that "a heavily discounted share price will significantly restrict any valuation discussions with potential offerors in the future".
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Lighthouse shareholder Simon Taylor-Young notes that "the share price fall means that the Company will be remembered as having delisted at a capitalisation of about £3m, compared to the c£6.5m before the announcement, so ironically the Board has set a benchmark way below its former value. Lighthouse should not be remembered as a £3m company."
ShareSoc also notes that the year end net cash balances of Lighthouse Group were £11m so there was no financial reason why some kind of scheme for buying out dissenting shareholders could not have been contemplated.
The Circular refers to the Company's "heavily discounted share price" yet does not appear to have considered other ways of enhancing shareholder value and maintaining a stronger share price. The Company reported the aforementioned cash balances yet raised the possibility of a reduced or even waived dividend in the forthcoming year. The Company does not seem to have considered alternatives to the delisting that might have reversed the discount they complain about, such as a sale of the company, a tender offer or a return of cash to shareholders. Any one of these could have delivered more to shareholders than the current sub 3p share price.
About the Author's Newsletter
The ShareSoc Informer is the monthly newsletter of the UK Individual Shareholder Society. There is a real need to encourage direct investment in the UK stock market, but individual investors will be discouraged if their rights and needs are ignored. One reason why ShareSoc was formed was to ensure that… ...read more or visit website »
Disclaimer:
Lighthouse Group plc provides financial advice on retail financial investments and regulatory authorization and related services to independent financial advisers located throughout the United Kingdom. The Company is engaged in the provision of financial advice to customers and regulatory authorisation to independent financial advisers operating from locations across the United Kingdom. The Company operates in three segments: Lighthouse Financial Advice (LFA), Lighthouse Advisory Services (LASER) and Specialist Services. LFA segment consists of advisers focused on providing financial advice. LASER segment authorises and services 370 selfemployed advisers drawn from the three previously separate entities LighthouseXpress, Falcon Group and LighthouseFSAS. Specialist Services segment trades as LighthouseCarrwood and Lighthouse Group Employee Benefits, and consists 25 salaried advisers servicing private clients and corporate accounts. more »
1 Comment on this Article show/hide all
First, I apologise for not being able to help, I always enjoy a good fight but have run out of hours to get involved. I have several "actions" like the one below to attend to now.
If I was involved, and had a small amount of shares, say £1000 worth, I would threaten then issue a small claims court action to recover either;
i). The full share price before the company value fell from £6.5 million to £3 million, or
ii). My "share" of the £11.5 million cash pile.
The last time I was there, I was plaintiff in person against a firm of accountants, and they had a barrister plus a solicitor in court. The judge saw it was an unfair fight, dismissed my claim as incomprehensible, dismissed their counter claim and awarded me costs against them. Overall, it must have cost them between ten and twenty times the sum of money I was trying to recover.