McGrath rebels join forces to sell 14 percent stake

McGrath rebels join forces to sell 14 percent stake
McGrath rebels join forces to sell 14 percent stake

The Drummoyne-based activist investor Matthew Donnellan emerged yesterday as lining up to potentially acquire a 15 percent stake in McGrath this Friday.

The shares are being mostly offered to the market by former McGrath agents and senior executives.

The stock has been offered through Wilson, seemingly volunteering Donnellan as the likely raider.

The press advised the 47-year old Donnellan had once acquired a similar stake in then struggling pub owner, Lantern Hotel Group, "before forcing out the management and instigating a turnaround in its strategy that delivered strong returns to investors through an asset sell down."

The 14.66 percent stake would make the former Allphones CEO sit as the second biggest shareholder behind founder John McGrath.

The press were tipped off that Donnellan was "an admirer of the McGrath business and brand, but not the performance of its board."

"I don't own any shares in McGrath so I have nothing to say at this stage," Donnellan oddly told the press.

The 14.66 per cent combined stake in McGrath was created by the shares of former McGrath director of sales Matt Lahood, Geoff Lucas the former McGrath chief operating officer who has since moved to artisan bakery group Sonoma, and former agents Ben Collier, Stephen Chen, the Leichhardt agent Shad Hassen and Brad Gillespie, along with a remaining McGrath agent Bethwyn Richards.

The shares floated at $2.10 in the initial public offering in late 2015.

The block trade, which is being handled by stockbroker Wilsons, will be available for purchase from Friday when 46.3 per cent of shares in the company come out of escrow.

A document filed to the Australian Stock Exchange said each of the parties intended to act in a "co-ordinated manner in relation to any sale of their shares in McGrath Limited".

What they hold

Geoff Lucas 6.7 million shares

Bethwyn Richards 2.78 million

Shad Hassen 2.78 million

Steven Chen 2.78 million

Matt Lahood 2.78 million

Ben Collier 2.78 million

Brad Gillespie 760,000 shares

The rival real estate agents - now at The Agency - hope selling the shares as a block could achieve a premium price.

McGrath CEO Cameron Judson advised McGrath remained a "a long-term holder of stock" but didn't advise further on any future purchasing or privatisation plans.

McGrath shares closed down 2 percent at 77 cents on Wednesday, and this morning was trading at 78 cents.

In 2016 Donnelley paid $8.05 million through Ward Partners for his Drummoyne harbour front house which had been marketed with $6.5 million hopes.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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