Thursday, 10 October 2013

Abbey Protection - Takeover

I had been thinking I would transfer AIM-listed Abbey Protection from my trading a/c to my ISA but, it seems following yesterdays announcement, I will not need to bother.

The directors have agreed a sale of the company to US insurer Markel for an agreed price equivalent to 115p per share. This is a 5p discount to the recent market price of 120p. In my experience, it is unusual for the directors to agree a sale of the company for LESS than the current market value so, for me there is probably more to this than is immediately apparent.

Chairman Tony Shearer said ' The board believes the acquisition by Markel gives Abbey an exciting opportunity to build a platform for further growth through Markels scale and financial strength'.

It appears to be a 'done deal' and there is probably nothing small shareholders can do.

I will therefore be looking at possibilities for another purchase or top up when the proceeds are received.


  1. I have not come across Abbey Protection before, so it was of interest to look at developments. It seems a strange situation, but I guess this is one of the downsides of management with a controlling interest in the shares. Although I would rather my companies' directors have a substantial shareholding than not.

    Interesting to see Liontrust amongst their shareholders. I remember that Anthony Cross, the Investment Manager of their Smaller Companies Fund, will not invest in a company where the directors in aggregate own less than 8% and is quite disciplined in selling an investment where the directors' holding falls below 8%.

  2. Hi Jeff,

    I'm not surprised you have not come across Abbey before. I read a feature in mid 2011 on Motley Fool, and after doing a little more research, decided to add a small holding to my portfolio as the yield was around 6 or 7% at the time (share price 78p).

    I will be sorry to see it depart as it has provided a decent return of both capital appreciation and dividends including a 5p special divi earlier this year.

    I believe the sale should be completed in January.