The Irish Stock Exchange, or Euronext Dublin as it is now known, spends a lot of time and lobbying muscle telling the Government it needs support to help make the stock market more attractive to small investors who traditionally are more likely to leave their savings on deposit than in shares.
Balmoral International Land delisted from the exchange more than a decade ago, but given how the company has effectively moved to force small investors off its share register, it begs the question why the so-called “little guy” would want to invest in shares in general.
At a gathering in Arthur Cox’s office this week some of Irish commerce’s blue bloods told thousands of small shareholders they were no longer welcome as investors in the listed business.
The McCann family owns a majority stake in Balmoral International Land, formerly Blackrock International Land, the property business spun out of one of their previously listed businesses – fruit importer and distributor Fyffes.
On Thursday, at a fractious extraordinary general meeting whose outcome was decided well in advance given the weight of shareholdings, company chairman Carl McCann forced through a motion taking the company fully private and, in the process, forcibly buying out “small” shareholders – those with fewer than 25,000 shares in the business, a group that owned more than a fifth of the business before Thursday, at €10.50 a share.
Small is relative in McCann’s world. These ousted shareholders would have had holdings worth up to just shy of €262,500 at the takeout price which is hardly small change. The company argues that most had holdings of 500 or fewer shares but that’s still an investment of up to €5,250.
Others, including AIB and PTSB, have offered similar buyouts of small investors but they have included an opt-out clause for anyone who was interested in sticking with their investment.
The McCanns and their advisers tried to persuade the shareholders being ejected that they were doing them a favour but a vocal group of shareholders – almost all investors of many years’ standing – was not buying it.
Why, they wanted to know, were they being forced out just as the business had returned to health and started making money from its property investments. And, more particularly, why at a substantial discount to the €18.72 net asset value of the portfolio and the €12 price at which a deal for shares was done on the grey market just the previous week.
Why indeed.
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