Research7 Oct 2010 00:45
Property veterans aim for acquisitions after buying 30% of Lipman shell Leo Insurance
Three veteran entrepreneurs have taken control of an AIM-listed shell company and plan to turn it into a property business.
Neil Sinclair, the 67-year-old founder of property agent Sinclair Goldsmith and former chairman of investor Mission Capital, has teamed up with Panther Securities chairman Andrew Perloff and company registration entrepreneur Stanley Davis, to buy a 29.9% stake in Leo Insurance Services.
The trio bought the stake from Larry Lipman and his brother, Errol, who run the small listed property company, Safeland. The group paid around £48,500 for the 2.16m shares at 2.25p each. This week the shares were trading at 3.38p.
The Lipmans demerged Leo from Safeland in March 2005 and subsequently bought a 50% stake in property insurance company, Grafton. But, after making no further acquisitions and Leo running at a loss with net liabilities of nearly £100,000, the Lipmans decided to search for “alternative options”.
Although they have sold a 29.9% stake in Leo, the Lipmans still retain around 17% of the company’s shares and, through Safeland, have bought the 50% stake in Grafton for £90,000, leaving Leo as a shell. The £90,000 consideration comprised £15,000 in cash and the offsetting of £75,000 of debt owed by Leo to Safeland.
Sinclair, Perloff and Davis have changed the name of Leo to Palace Capital and are embarking on a new property strategy.
This marks a return to the listed sector for Sinclair, after a bitter falling-out with Elliott Bernerd at Mission Capital. Sinclair and his daughter, Emma, founded the firm in 2005 with the backing of Chelsfield Partners, set up by Bernerd and Sir Stuart Lipton, and Bernerd through a private investment vehicle.
But the Sinclairs were ousted in early 2008 and brought an action against Mission Capital, citing a “sudden and brutal coup”. A settlement was reached last year.
Sinclair, who is managing director of Palace Capital, said the cash-strapped company, which only has £75,000, would fund purchases with shares.
“Any deal will effectively be a reverse takeover, so there’s no point in just doing small deals,” Sinclair told Property Week. The initial investment focus is car parks, outdoor advertising and billboarding, and care homes. Sinclair and Davis, who is chairman, believe that parking is a recession-resistant business and that shortage of capacity in many towns is a significant issue.
Sign In
Follow the stocks
