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LONDON (Alliance News) - Spark Ventures PLC Tuesday said it has raised a total of GBP13.9 million from a placing and asset swap and said it intends to raise a further GBP3.1 million via an open offer in order to pursue a new investment strategy in partnership with fellow London-listed Gresham House PLC.
Gresham House released a separate statement Tuesday confirming the partnership.
Spark said it plans to appoint Gresham House as its new investment adviser, replacing its connected existing manager Spark Venture Management Holdings Ltd, in order to pursue its Strategic Public Equity investment strategy, it said in a statement. The termination of the management agreement will result in a GBP2.3 million payment by Spark Ventures to Spark Venture Management, which in turn will extend the license to Spark Ventures of the Spark name until October 2017.
The strategy targets "superior long-term investment returns through applying private equity techniques to investing in public markets", Spark added.
Gresham House will focus on inefficient areas of the market, taking influential block stakes in smaller companies and then constructively engaging with those companies to identify "value creation catalysts".
Gresham House will also make a "significant investment" in Spark to "support the new investment mandate", it said.
"The new management team has been active in pursuing both organic and acquisition opportunities for developing the company's specialist asset management business and is pleased to announce that it has conditionally secured its first investment advisory agreement with Spark," Gresham House said.
"We have a high degree of confidence in Gresham House's ability to execute this strategy as our new investment manager, with the board also personally committing to participate through the open offer alongside the Gresham team in the fundraising," said Spark Chairman David Potter.
The GBP10.1 million placing is not underwritten, and the open offer will allow up to 349,038 new shares to be issued on the basis of one open offer share for every existing 1,200 Spark shares, which then will be consolidated on 1-for-200 basis. The shares are being offered at a 10% discount to the post-consolidation equivalent price of 1,000p, or 900p per share.
Gresham House will take up half of the placing shares, worth GBP5.0 million, while directors of Spark and Gresham House will subscribe to GBP485,000 in shares via the open offer.
The proposed asset swap with Gresham House will see Spark acquire shares in numerous companies. Spark will acquire 2.1 million share in SpaceandPeople PLC for GBP1.4 million by issuing 151,250 Spark shares to Gresham House.
Spark also will acquire 5.0 million shares in Miton Group PLC for GBP1.3 million by issuing a further 145,833 new shares. The last deal will see Spark acquire 3.5 million shares in Castle Street Investments PLC for GBP1.1 million by issuing 123,192 new Spark shares.
Spark is acquiring the shares in Miton from River & Mercantile Asset Management, and the shares in Castle Street are being acquired from Majedie Asset Management.
Spark shareholders will vote on the company's propositions on August 6.
Spark shares were down 0.9% to 4.96 pence per share on Tuesday afternoon, whilst Gresham House shares were down 0.6% to 266.0 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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