The board of the AIM-listed telecoms software company at the heart of a share sale row will enjoy a spectacular pay day once the business has been sold to a rival.
Synchronica has revised the terms of its agreed sale to its Swiss-listed rival Myriad so that the business is valued at just over £24 million. Yet buried in the detail of the terms of the deal are a series of lucrative payments for top executives that will be paid despite the parlous state of the business.
Angus Dent, the Synchronica chief executive, is entitled to a payment equivalent to 1.25 per cent of the value of the deal, which amounts to more than £300,000. He will also receive £141,803, a year’s basic salary, if he leaves the company after the sale to Myriad is completed.
Mr Dent spent £49,000 on 800,000 shares in Synchronica last November, only three weeks after Myriad first made an offer for the business that the company did not reveal. Those shares are now worth £120,000.
David Mason, executive chairman, who gave his blessing to Mr Dent’s share purchase, will be handed options of more than one million shares in the company at an exercise price of 15p a share — the price that Myriad is paying for the business. He will receive a pay rise to £48,000 once the Myriad takeover is completed and will also be entitled to a one-off payment equivalent to a year’s salary as a result of the sale.
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Simon Thorne, finance director, will be issued with options to acquire 2.5 million shares at 15p and will receive a one-off payment of at least £150,000 as a result of the sale.
News of the awards could further enrage shareholders given that the stock, which traded at over 200p five years ago, has been in a downward spiral since.
It is not clear whether Mr Dent, who received a pay rise to £200,000 a year as well as a £50,000 bonus for 2011, will stay on with the business after the sale is complete. However, Myriad, which is based near Manchester, warned that the decision might not be his to make. “Myriad intends to hold discussions with members of the senior management of Synchronica regarding their future involvement,” it said.
The agreements come despite a cash shortage at Synchronica that has resulted in Myriad striking an unusual agreement to lend the business $3 million in order to pay its staff. The Tunbridge Wells-based company succumbed to the Myriad offer after a Canadian business rescinded a loan agreement due to the takeover talks.
Myriad has said that it will begin a three-month review of the Synchronica business. “Myriad has no specific plans to make personnel changes, [but] it is likely that some changes will be made,” it said.
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Synchronica’s funding squeeze was the result of its acquisition of Nokia’s mobile messaging business. The deal was hailed as a coup at the time but the company struggled to meet payments.
Going down
502½p Synchronica’s share price in January 2007
12¼p The closing price on Friday