Lighthouse Group has responded to criticism surrounding its proposed de-listing from the Alternative Investment Market of the London Stock Exchange by denying the management team are to use the move to buy out the company, but has refused calls to set a fixed price for shares.
In a statement to the stock exchange this morning (24 July), the board of Lighthouse said that the decision to de-list, announced on 9 July, was being driven primarily by the lack of appetite for IFA firms among investors and the subsequent inefficacy of being listed as a method of raising capital.
The board said that it was aware of speculation that “it is the intention of some or all of the group’s management to take control of the company” through the de-listing. The board said that “there is no such intention”.
Since the announcement that the firm was to de-list there has been widespread criticism of the move.
Shareholder Paul Mumford, senior investment manager at Cavendish Asset Management, has a 5 per cent holding in Lighthouse Group shares in his £17m Aim fund and said the manner of the de-listing has created uncertainty over the future of the group.
He said: “Lighthouse management thinks there might not be much of a future for the company once the RDR reforms come into effect. The de-listing is shoddy to say the least, and will disproportionately hurt the majority of shareholders.”
Another shareholder, Simon Taylor-Young, who formerly advised on mergers and acquisitions, claimed the announcement that the IFA firm was to de-list had created a poor price for sellers.
He said: “With just three weeks to the general meeting, there is no orderly market to sell into as the market is swamped by forced sellers.
“There is inadequate information as to whether the de-listing would make a real difference to the overall value of the company as a de-listed company. That might persuade small shareholders to hold on as the most recent results signalled a cut or even cessation of dividend payments.”
Mr Taylor-Young called on the group to protect investors against further falls in its share price by setting a fixed level for people who want to sell their holdings.
In the announcement this morning, the group gave no signal that it would set a fixed price for shares. It did however counter concern in some quarters that it was de-listing to avoid governance requirements by stating that it will maintain communication with shareholders.
In particular the board said it would: hold regular Shareholder meetings; maintain non-executive representation on the board; operate the audit, remuneration and risk committees; review the feasibility of restoring dividend payments; and maintain an “investors” section on its website.
David Hickey, chairman, said: “The plain truth is the lack of positive sentiment in the stock markets for IFA businesses. For Lighthouse, at this time, there are no attractions to being on Aim, and too many disadvantages.”