The long-running corporate governance row between Gresham House Strategic (GHS:AIM) and major stakeholder Gresham House (GHE) has been brought to an end with the termination with immediate effect of Gresham House Asset Management as investment manager and the appointment of Harwood Capital LLP in its place.
In order to facilitate ‘a smooth transition in the interests of all shareholders’, Harwood has offered to buy Gresham House’s entire 23% holding in the smaller companies investment trust at a price equal to the latest published net asset value per share.
As of last Monday, the Gresham House Strategic net asset value was £19.06 against a share price today of £17.02 which means Harwood would have to pay a premium of almost 12% on Gresham House’s stake.
Once the FCA approves Harwood’s appointment, GHS will complete the separation by renaming itself Rockwood Strategic.
Today’s news brings to an end months of infighting, with GHS chair David Potter being forced out in July in the footsteps of fund manager Richard Staveley who quit in May after just over a year and a half in the job.
At one stage it was thought GHS might be merged into the much larger Strategic Equity Capital (SEC), which moved manager to Gresham House last year, but there was fierce opposition from the ranks of GHS.
It is hoped the appointment of Harwood will help reduce the substantial discount to net asset value which has prevented GHS from issuing new shares and growing its capital base to invest in new opportunities.
The fund will once again be managed by Richard Staveley, after his contractual obligations to Gresham House Asset Management end on 1 December, so as to ensure some kind of continuity.
Meanwhile, to improve value for shareholders, there will a ‘significant’ reduction in management fees and a revised performance fee, both of which will be capped if the net asset value exceeds £100 million.
