Investors in transport group Stobart have been advised to abstain in a key vote in two weeks to approve the company's plan to buy a property portfolio from two of its directors.
Investor advisory group PIRC said it had reservations about the deal, which involves the purchase of a group of UK properties for just over £101m including £88.5m of debt from Stobart's chief executive Andrew Tinkler and chief operating officer William Stobart.
This is not the first time the public company has bought assets from the two directors. In 2009 it took over Carlisle Airport from Tinkler and William Stobart to add to its existing airport business at Southend.
On this latest deal, Pirc said:
Although Mr. Tinkler and Mr. Stobart are not voting on this proposal, there are inherent conflicts of interest in this transaction.
Also, the company sold these properties five years ago with bank debt of £79.82 million, and it is buying it back with net debt of £88.85 million. The company has not fully discussed future actions in relation to the debt and there is little discussion of how this debt is beneficial to current shareholders.
Furthermore, the independent net valuation results in an amount of £93.51 million. The company is effectively paying more than that (£12.35 million plus £88.85 million in debt) and the independent directors have provided no basis to their conclusion that the acquisition had a fair price.
Because of the above reasons, an abstention is recommended.
The meeting is due to take place on 13 February. In the market Stobart's shares have slipped 3p to 125p.
