Today should be a very interesting day in the corporate history of UK spreadbetting firm London Capital Group (LON:LCG). Today’s general meeting and shareholder vote will likely determine the fate of LCG – primarily, whether or not it ends up being ‘rescued’ by a £17.5 million investment to be made by an investor group led by Charles-Henri Sabet, or if shareholders try to instead sell the company outright. If the latter, it appears as if online sports betting and financial spread betting firm Spreadex will try to step in and re-initiate its £0.30 per share all-cash bid for LCG.
Spreadex’s announcement Wednesday afternoon that it had approached the LCG board in late June, offering an all-cash bid of £0.30 per share for the company, sent LCG shares soaring – initially by as much as 36% to £0.29, before settling at £0.25, still up 17% for the day.
Clearly, LCG shareholders cheered the idea of a sale of the company at a premium, as opposed to waiting it out as Sabet and his team first dilute their holdings, and then try to turn around the struggling LCG.
We’ll see how the votes go on Thursday.
Even if shareholders do back the Sabet financing package, which the LCG board recommends, it is certainly possible that Spreadex and existing LCG shareholders might try to take legal action to demonstrate that the board is not maximizing shareholder value – £0.30 in cash today is a lot more than what LCG was being valued at before news of Spreadex’s offer hit the wires.
Stay tuned to LeapRate, we’ll bring you all the news as it happens.