Small Talk: Why investors may dig the chairman's mining experience
Monday 20 September 2010
One thing that really gets the blood pumping in the boardrooms of Alternative Investment Market (Aim)-listed companies is a bit of pedigree – it gets the investors very interested in the shares, you see.
Last week, Avocet Mining, the £260m-odd gold digger announced that Russell Edey was moving into the chairman's office, taking over from Nigel McNair who had been with companies associated with Avocet for more than two decades.
The good news for Avocet is that Mr Edey is positively dripping with mining pedigree, having been until May, the chairman at AngloGold Ashanti, a £4bn gold mining group that mixes it with the very biggest boys.
He began his career in the finance division of Anglo American in Johannesburg and Avocet is crossing its fingers that his finance and natural resources sector experience will help the group grow into a mid-tier gold producer, the company says. Of course, with his large cap background, he might also know one or two people that might be keen to buy Avocet too.
The company certainly doesn't mind changing things about. As well as changing its chairman, Avocet has also changed its chief executive this year.
Back in May, it was also forced to deny that it had sold its assets in South-east Asia.
News of a sale, initially reported in The Jakarta Globe, seemed sufficiently detailed; the North Lanut and Penjom mines had been sold for $250m the report said, to PT Lebong Tandai, a subsidiary of Indonesian group PT Merukh Enterprises. The only problem with the report is that it was not entirely true, said Avocet.
The company rushed out a statement saying that the sale had not gone through, and that discussions were only at an early stage.
Small but aiming to be a Motive force
Aim-listed Motive Television – a TV technology group – is getting tuned in to what sort of company it wants to be in the future.
The tiny group (market cap of less than £3m) said on Friday that it was proposing the acquisition of Adecq Digital, which currently owns the technology Motive distributes. Motive said it is hoping to raise about £4.75m to fund the takeover.
The news follows an announcement earlier in the week that it was paying £10,000 – we told you it was small – for the assets of NXVision, a Scottish technology company that finds itself in liquidation.
Before getting itself in trouble, NXVision had developed proprietary software that allows any internet-connected device or mobile phone to obtain and display anything available on a home set-top box or internet-connected television – very clever, we would say.
Mick Pilsworth, Motive Television's chairman said: "We believe that the NXVision's software could be easily integrated with the [our] technology and we are excited by the possibilities that the combination could offer.
"This demonstrates our ability to seek out technological opportunities to complement the existing business, which we will continue to do, in turn adding value for shareholders."
A Capital launch in difficult times
"Most brokerages have real problems," reckons Andrew Monk. "There are too many, and there is not much money to go around."
Given his comments, it may not have been that wise to launch his new firm, Third Quad Capital, in the prevailing conditions.
But Andrew Monk has been around the block a few times, and as former chief executive of Oriel Securities and then Blue Oar, he knows a thing or two about being a small-cap broker.
"It was obvious to us before we set this business up that 20 per cent of the people in a brokerage make 80 per cent of the profit," says Mr Monk. "What we tried to identify was how to start a business with just that 20 per cent of the people. We looked at the sectors where there is plenty of primary business, like natural resources and oil and gas, which we can do, but also decided that it was crucial to get a good distribution team in place – most corporate brokerages don't bother with distribution, but it's vital."
The new group is still very young and is yet to take a bow with a primary deal, but watch this space.
Before all that falls into place, however, Mr Monk has been busy with last week's emergency general meeting at Astaire (which, of course, used to be known as Blue Oar), where he voted against the current board on a number of motions.
As expected, the board saw off a number of resolutions. Nonetheless, Mr Monk got over his objective of sending a message to the current management team, which he accuses of running the company badly.
Three weeks ago, Astaire said that talks with a number of potential investors, which would have effectively led to a change of control, had collapsed or as the company put it, "did not reach a mutually acceptable conclusion".
Nonetheless, it is not all bad news. In the announcement to the stock exchange, Astaire, confirmed that it was locked in talks with two other potential suitors over the sale of its securities business, Astaire Securities, and Rowan Dartington, its private client arm.
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