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Troubled Stanley Gibbons up for sale

Troubled Stanley Gibbons up for sale

For Stanley Gibbons (SGI) investors, this week has been rockier than most. Last week the share price rose 15 per cent in a single day's trading on news that Disruptive Capital, a private equity firm led by City financier and former pensions adviser to Boris Johnson, Edi Truell, had approached the group with a potential takeover offer. But there were no details released and the board warned shareholders that no deal was on the table.

Sure enough, it seems negotiations broke down over the weekend because come Monday morning Stanley Gibbons had issued a further statement. This time the board said it was putting itself up for sale, inviting potential suitors to come forward with offers. It also claimed that the strategic review of the company - which has been more than a year in the offing - was pretty much complete. The group has managed to claw back £10m in operating costs, as well as earn itself an additional £6.3m through various disposals. It went on to say that the group now had "a clear focus and understanding of its competitive advantages and achievable corporate goals". But it wasn't enough for the market to ignore the fact that Disruptive Capital had walked away, and shares fell back 15 per cent as a result.

Stanley Gibbons has managed to claw back £10m in operating costs, as well as earn itself an additional £6.3m through various disposals”

Game over? Not so fast. Disruptive Capital was back in the picture at the time of going to press, clarifying to the market that it would like to take part in the formal sales process launched by Stanley Gibbons. There's a caveat, though: Disruptive has only agreed to participate in the bidding round if any offer it makes is eventually recommended to shareholders by the company board unanimously. It seems Stanley Gibbons has agreed to honour this commitment, which in turn sent the shares back up 16 per cent.

IC VIEW:

We've long believed a public company structure isn't suitable for companies such as Stanley Gibbons, particularly in light of lumpy revenues and a lack of visibility over earnings. So we're not surprised to see private equity entering the mix. Although we're bearish on the stock, those still invested should hang on to see if a deal can be struck. Until details of any offer become clearer, hold at 12.5p.

Last IC View: Sell, 16p, 14 Apr 2016

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By Harriet Russell,
15 June 2017

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