A group of internal shareholders at AIM-listed law firm Gateley have sold £6m worth of shares, it emerged last week.
An accelerated bookbuild to institutional investors was announced and completed on Friday, with 13 directors and managers, along with the firm’s employee benefit trust, selling 4m shares between them at 150p each.
Gateley’s share price dived 10% during the day from 171.5p to 154p.
The shares represented approximately 3.6% of Gateley’s issued share capital, and it told the stock exchange that the placing was undertaken “in order to satisfy market demand and broaden the institutional investor base of the company”.
It confirmed today that there was “significantly more demand” for shares than were available.
Chief executive Michael Ward, who sold 164,450 shares, said the new shares had been snapped up by both existing shareholders and “a significant number” of new shareholders.
“Our newly broadened share register provides a strong and supportive base from which we can continue to grow our business and we welcome new holders onto our register and thank our existing investors for their continued support…
“The placing is consistent with our orderly approach to broadening of the share register since IPO and we fully intend to maintain the same level of discipline and control going forward.
“The board is also reviewing the company’s existing employee share incentivisation arrangements with a view to simplifying the current schemes, and will update the market in due course.”
Gateley’s share price has been up and down of late. It listed in June 2015 at 95p. It was 130p by the end of 2016 and 172.5p a year later, reaching 190p not long after. However, it was then downhill since, and it saw out 2018 on 128p, a 26% slide on the year, making it one one of the poorest performers among legal shares last year.
However, the price started recovering after Gateley announced in early January that it had recorded double-digit growth across all financial indicators in the first half of its financial year.
On Gateley’s admission to AIM in 2015, it former partners held 70% of the shares. These former partners voluntarily entered into five-year lock-in agreements that permits them to dispose of up to 10% in any 12-month period after the first anniversary of admission.
In October 2017, a group of internal shareholders sold £10m worth of shares.
Directors, staff and the trust now hold 53.4% of Gateley’s shares.