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driveat15, I agree that Seafox was indeed the catalyst for the direction the Company has moved in; credit where credit is due. Fundamentally however, I feel they are a competitor and they have absolutely demonstrated that they want to own the company and they want it cheap. As a SH, I feel having them on the board is not in my best interest. Being in a position to negatively affect the SP to facilitate their takeover of the company as cheap as possible should absolutely be resisted, and having seats on the BoD goes a long way in helping them achieve that takeover. To be clear, I fully understand that all public companies are ‘for sale’. The job of the BoD and the Chairman is to ensure that ALL SH’s get fair value and resisting Seafox representation on the BoD is a key part of that IMHO.
@driveat - very valid argument that Seafox stake helped push the board level changes and the management change last year (FYI I did vote for them in that AGM). However, s**t had hit the fan in late December 2018 (pre Seafox entry) and the changes were bound to happen as well with banks breathing down their neck.
But on this vote, if I were Mazrui, I would vote against it and make Seafox pay a premium to buy me out when the 6month standstill ends......unless of course Mazrui wants to stay invested with whatever value creation plans Seafox brings to the table :)
On the other hand ....
The Board only got refreshed last year BECAUSE of SeaFox’s actions in buying astake and calling a GM last year. The general consensus seems to be that the new Board have done a lot to turn GMS around. If SeaFox hadn’t agitated last year and the old board was still in place where would GMS be now?
Several large shareholders have been persuaded that cash now was more attractive than staying invested and have “jumped ship” - most of SeaFox’s stake building in the past few months has been achieved by buying out big stakes at both 10p and 22p.
The Board can no longer claim support from more than 50% of shares - Mazrui’s 12.65% was previously included in support of the Board as they had written a letter of support, but they voted against the Board at the AGM. Some of the large stakes SeaFox has purchased (such as the 22million at 22p) have probably come out of that support as well, although strangely the sellers have not filed TR-1 notifications as they should have for changes in major holdings.
SeaFox hold 29.99% of the shares and have requested Board representation of 2 directors out of 7 - that equates to 28.6% of the voting power of the Board to represent their views as 29.99% shareholders. That doesn’t seem unreasonable to me.
Far from not attending the AGM or not reading news releases I think you’ll find SeaFox are following events at GMS VERY closely! They have invested a lot already in building their stake and have been agitating for change for around 18 months now.
Since SeaFox were instrumental in causing the Board to be refreshed last year, and since the share price was languishing before SeaFox’s recent renewed interest, I for one think we have a lot to thank SeaFox for.
Thanks, Si547 for the link. I feel like Seafox is thinking that the SHs know nothing. I also feel like I need to clarify some points from Seafox’s letter:
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“This is after shareholders representing c.59% of GMS shares voted at the Annual General Meeting on 30 June voted”
When you act in concert with other heavyweight parties is hardly SHs sentiment. You should’ve said that you, Mazrui and Horizon didn’t agree with the resolutions.
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“We note that the price of 10 pence per share stated in our announcement of 5 May 2020, represented a premium of approximately 257% to the closing price of a GMS share on 24 April 2020”
Sounds good in paper and for those who invested at rock bottom prices. 7p and the subsequent increase to 10p for a company with 13 vessels (and I checked: 7 of them virtually brand new) was really a slap in SH’s face. Had you made a serious offer GMS potentially would’ve been yours.
I also believe that Seafox underestimated GMS heavily. They thought (like most of us) GMS would not be able to turn the ship around on time (pun intended). For this reason, they tried to get GMS as cheap as possible by taking advantage of external factors outside the company’s control. Luckily that didn’t work. That being said, you already bought 29.99% at a really cheap price. Can’t say you didn’t do a good job there and you should be happy about it.
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“We completely disagree with GMS's statement that our interests are not aligned with those of other GMS shareholders.”
Question is: can Seafox really afford GMS now and go hostile? (note: IMO 22p is not a fair price anymore). Or would they try to disrupt the company from within in order to influence the SP again, keep it low to the detriment of the rest of SH but to their own benefit? That’s another question your letter doesn’t address.
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“GMS's Board is in urgent need of further director appointments to provide the experience and know how required in order to address its recent poor performance and further deterioration of its financial position.”
Poor performance and deterioration of its financial position as of when? You clearly weren’t present in the last AGM or haven’t read any of the recent Trading Updates. I think this sentiment belongs to 2019 just like your proposal of 10p.
Looks to me that Seafox is trotting out the same justification for inclusion on the BoD; the same justification that previously failed.
When they say "GMS's Board is in urgent need of further director appointments to provide the experience and know how required in order to address its recent poor performance and further deterioration of its financial position", to me they appear to be referring to the earlier performance because currently, the Company appears to be doing very well, even during the difficult COVID pandemic.
https://www.prnewswire.co.uk/news-releases/statement-by-seafox-international-limited-seafox-we-and-us--870529989.html