31st Jan 2019 16:46
LONDON (Alliance News) - Stock Spirits Group PLC on Thursday afternoon responded to shareholder Western Gate's comments over its EUR26.5 million acquisition of Distillerie Franciacorta SpA, an Italian producer of grappa, limoncello and sparkling wine.
Western Gate Private Investments Ltd, a 10% shareholder in the drinks company, on Thursday reiterated its intent to vote against the re-election of two of the company's directors.
"Assuming this is a cash acquisition, it will be immaterial to the company’'ss balance sheet. Stock Spirits will continue to have the lowest net debt/Ebitda position among its peers, and its ability to deliver cash back to shareholders through a higher and or special dividend or do further M&A is unchanged," Western Gate said in a statement.
"This simply does not go far enough and is another example of Stock Spirits only acting under pressure from shareholders," the shareholder added.
In response, Stock Spirits said: "In addition to being a value-creating acquisition, it leaves us free to carry out other M&A activity as and when attractive opportunities arise. And, as we have said previously, in the absence of M&A we would of course consider returning cash to shareholders via additional shareholder distributions."
"This is an opportunity that we have been looking at for more than a year now, and discussions have taken place over many months. It has nothing to do with shareholder pressure and everything to do with being a truly compelling opportunity that has clear and attractive synergies with our existing Italian operations," the company added.
On Monday, Western Gate said it wanted Non-Executive Chair David Moloney and Senior Independent Director John Nicolson to be removed from the board, on the grounds of alleged poor strategy and a failure to make mergers and acquisitions last year.
Stock Spirits said on Monday that the two directors have the support of the board.
Shares in Stock Spirits closed up 5.0% at 232.00 pence on Thursday.
Related Shares:
STCK.L