Daily News

View All News

UK – Battle for control of Kellan Group underway

25 June 2013

Kellan Group (KLN: LSE) shareholder James McHugh has issued a counter fundraising proposal, offering a 50% premium to the current proposal by a majority shareholder. Mr McHugh currently holds an estimated 5.2% stake in the Kellan Group.

Mr McHugh said, “I am pleased to offer my counter proposal for the Board’s consideration. I believe this is significantly better than the current proposal offered to shareholders, resulting in less dilution for existing Kellan shareholders.”

The current proposal was made by Kellan’s largest shareholder Paul Bell, who holds an estimated 40% stake. Mr Bell proposed £900,000 in equity and £600,000 in unsecured convertible debt, to replace the £600,000 interim loan facility. 

Mr McHugh added, “To confirm, I am willing to subscribe for new ordinary shares in Kellan at a 50% premium to the current price being offered by Paul Bell. Additionally, I will make available a £600,000 loan facility to Kellan, should the current interim facility with Paul Bell be suddenly terminated by him. I was informed that Paul Bell is not willing to improve his price and that he is likely to vote against any resolutions necessary to implement my higher offer should they be put to the shareholders. I do not intend to collude with him, as I believe he is taking advantage of his significant shareholding, dictating terms for a fundraising which benefits him and is contrary to the interest of the rest of the shareholders.”

In a statement issued today, the company said, “The independent Directors, along with their advisers, are in the process of considering the merits of both potential transactions along with the likely challenges in implementing them. The independent Directors are committed to concluding their deliberations as soon as possible and are working with the Company's major shareholders to reach a satisfactory outcome in the best interest of shareholders as a whole, with a view to concluding a transaction as soon as possible. A further announcement will be made in due course”.

Kellan Group operates through three recruitment brands; Berkeley Scott, Quantica and RK. The company recruits professionals in finance & accounting, information technology, supply chain & procurement, legal, retail, manufacturing, catering, hospitality and leisure and human resources.

In early morning trading, the company’s share price was 0.88 pence, down -75.1% from a year ago when it peaked at a 52-week high of 3.13 pence. The firm has a market value of £1.86 million.  


Add New Comment

Post comment

NOTE: Links will not be clickable.
Security text:*