Ultimate upsets major investors
by The PMA Team
The four biggest institutional investors in nightclub company Ultimate have approached its broker demanding a sale, The Sunday Times has claimed.
Scottish Widows, Artemis, Gartmore and Standard Life have lost confidence in the management of the firm after two of its biggest private shareholders sold large blocks of shares in the run up to a profit warning.
Both Stephen and John Rankin, who set up the business with brother Allan Rankin, sold the majority of their shares prior to a profit warning on 29 April. Stephen had 2.9 million shares about 12% of the company but on 29 March the company revealed he held less than 3% of the company after making a disposal. Likewise, John Rankin, who had held 1.6 million shares, reduced his holding to less than 3% by 22 March.
In addition, development director Tim Wynn sold 100,000 shares at 308p on 13 April just over a fortnight before the profit warning saw shares hit the 240p mark.
Ultimate has denied that any of the share sales were prompted by knowledge of the impending profit warning.
A senior City analyst told the Morning Advertiser: "What has happened doesn't put the company in the best light. You don't often see a raft of directors selling in a company like this. I think the problem at Ultimate is the lack of depth in its external advisors."
Another industry expert claimed that one of Ultimate's big institutional investors had probably leaked The Sunday Times claim to indicate the level of disquiet over the share sales.
He said: "The company is probably in the clear on these share sales. But one of the institutional investors is obviously far from happy. In any event, it's hard to imagine how a buyer for Ultimate can be whistled up."
