The investment firm stalking GYG is under pressure to sweeten a proposed £43 million bid for the superyacht painting and maintenance company after a lukewarm response by the board.
Harwood Capital announced last week it was in the early stages of evaluating a possible 92½p-a-share offer. The proposal includes an option for shareholders to take unlisted securities rather than cash.
Harwood Capital, which has until close of play on May 7 to “put up or shut up”, already has a 20.62 per cent stake as well as a letter of intent to accept the mooted offer from Lombard Odier Asset Manager, GYG’s biggest institutional investor with 26.89 per cent, giving it a combined 47.51 per cent.
Analysts pointed out that 92½p was the first figure to be put on the table and unlikely to be accepted. One analyst said he expected the company to use its scheduled full-year results tomorrow as a defence against Harwood’s current proposal, putting pressure on the firm to up the ante.
GYG advised its shareholders to “take no further action at this time”, pointing out that the mooted offer was a premium of only 10.78 per cent to the share price the day before Harwood showed its hand, while the Lombard Odier letter of intent was not legally binding. Under the required scheme of arrangement, the bid would have to be approved by more than 50 per cent, by number, of GYG shareholders who voted and 75 per cent by value.
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The Global Yachting Group was originally created in 2012 through the merger of two leading superyacht painting brands, Pinmar, dating back to 1975, and Rolling Stock, founded in 1989. Both were founded in Palma de Mallorca, where the company continues to have its head office. It was renamed GYG in July 2017 when it was floated on Aim.
Harwood Capital is run Christopher Mills, who previously established JO Hambro Capital Management. It acquired a 16.8 per cent stake in GYG in January from Lonsdale Capital Partners, the private equity firm that floated GYG.
Before the pandemic, the superyacht industry had enjoyed a period of strong growth but last year GYG’s revenue fell by 8.3 per cent to €58.5 million. However, its total order book stood at a record €53.8 million in January, 21 per cent ahead of the same point last year, while orders for this year are 24 per cent higher at €40.6 million.