In last week’s post before their AGM’s, I pointed out the need for both IDOX and Gladstone to produce positive, informative announcements at their AGMs to address the drift in their share prices. What we got were two totally different approaches – and two totally different results....
IDOX produced a one paragraph statement along the lines of “steady on the tiller”, that was short on any detailed information. However, the AGM appears to have gone well, with some discussions about “large pipelines”, “bid activity ahead of last year” and “robust demand”. But there appears to have been some frustration expressed by Directors at the lack of recognition by the market of IDOX’s value (a view that I would share). All AGM resolutions were passed, and the share price rose marginally.
Gladstone meanwhile, in the face of an attack from spurned bidder and 29% shareholder Constellation, produced a really positive, long AGM announcement and combined trading statement. Although short on quantified values, the announcement named customers, including some significant new customer wins, and detailed numbers of sites and facilities to be supplied. All-in-all, a very positive view......
Yet at the AGM (see here for the AGM results announcement), the majority of resolutions were voted down, the Finance Director not re-elected, and the auditors not re-appointed. In addition, the company’s ability to use its cash pile to buy shares in the market was curtailed (as was its ability to sell any of the 4.5M shares currently held in treasury). Whilst I have little doubt that this happened because Constellation wished to show its strength (and the constraints on the company buying/selling shares will assist them in their ongoing battle with the Board), questions have been raised about “dark forces” being at work, and perhaps there is another agenda in place – that does not include Constellation......
As a result, the share price has also increased marginally, and from a recent low of under 19p has today returned to be above 20p, but still some way away from Constellation’s 2008 bid of 25p.
What next ? – the EGM on 16 March 2009, to vote on Constellation’s request for a position on Gladstone’s Board. I think this whole saga could run on and on – unless another bidder appears – something that I feel is unlikely at the moment unless Constellation wishes to dispose of its shareholding – and I don’t think they want to do that just yet......
Update: the Gladstone situation made it into the FT today. The FT article quoted Constellation as saying it was committed to Gladstone’s future success but had voted down several resolutions because of concerns about corporate governance, director conflicts, compensation and other financial matters. “We believe that the removal of Mr Montgomery from the board was a necessary step towards addressing these concerns.”
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