Gabelli Value shareholders reject continuation (again) – At the General Meeting held on 7 December 2020, none of the resolutions set out in the notice of General Meeting dated 11 November 2020 were passed on a poll.
The voting was 35.6% for : 64.4% against on each resolution.
We’re going to reproduce the next section of the announcement in full:
“In the Board’s view, the voting results of the General Meeting demonstrate the stark lack of support for the proposals put forward in the resolutions by a significant majority of shareholders.
The ultimate parent company of Gabelli Funds, the Company’s investment manager, is GAMCO Investors, Inc. (“GAMCO”), of which Mr. Mario J. Gabelli, is the Chairman and Chief Executive Officer. Mr Gabelli is one of the senior portfolio managers responsible for the discretionary management of the Company and is also the executive chairman of ACG, a US publicly traded company whose Class A common stock is admitted to trading on the New York Stock Exchange. ACG was admitted to trading on 30 November 2015 following the spin-out of the business from GAMCO. The Board understands, pursuant to an announcement made on 7 May 2020, that Mr Mario J. Gabelli is interested in 27.8 per cent. of the voting rights of the Company (being 27,326,000 Shares), 0.4 per cent. directly and 27.4 per cent. indirectly through ACG, the Company’s largest shareholder.
At the Company’s Annual General Meeting held on 30 July 2020 (the “AGM”), an ordinary resolution was put to shareholders in connection with the continuation of the Company (the “Continuation Resolution”). The Continuation Resolution required over 50% of all votes cast to be in favour of continuation for it to be passed. The total number of votes cast against the Continuation Resolution represented approximately 65.6% of all votes cast (excluding those withheld).
As previously noted, following careful consideration of shareholders’ views, the current size and operational costs of the Company and Takeover Code considerations, the board of the Company (the “Board”) continues to believe that it would be in the best interests of the Company and shareholders as a whole to put forward further proposals for the members’ voluntary liquidation of the Company. This is the most straightforward and cost effective means to effect the clearly expressed desire of the majority of shareholders’ for a discontinuation of the Company, inter alia, from a tax perspective. It does, of course, require a special resolution to be passed and ACG may again decide to block it. The Board notes the statement contained within the letter from ACG published on 12 November 2020 that, at the General Meeting on 7 December 2020, it would vote its shares against a liquidation of GVP should it be put forward for shareholder approval at that meeting, effectively blocking the approval of a liquidation.
The Board repeats its previous requests that ACG take full account of the wishes of the clear majority of shareholders, since a members’ voluntary liquidation represents the most effective means of effecting discontinuation for shareholders as a whole. However, as noted in its announcement on 6 October 2020, if the Board puts forward the above as a resolution to a general meeting and should the special resolution to approve a members’ voluntary liquidation not pass at that general meeting, the Board at the same general meeting intends, subject to obtaining any necessary regulatory and shareholder approvals, to propose a separate ordinary resolution to effect a substantial capital return to shareholders likely by way of a tender offer.
As the Board has said previously, given ACG’s public statements in support of the Company’s existing investment strategy, the Board would be happy to discuss with it options that the Company could offer as part of a members’ voluntary liquidation of the Company. These include potentially distributing to ACG its pro rata share of the Company’s assets in specie, or, offering the option of a rollover vehicle with a similar strategy and manager to the Company for those shareholders not requiring a cash exit. As noted in the Circular, the Board is surprised that, given ACG’s relationship with Gabelli Funds, and its stated support for the investment strategy currently followed by the Company, it cannot discuss with Gabelli Funds a way to continue its exposure to that strategy using another means and not through holding Shares in the Company.
A further announcement will be made as soon as practicable.”
GVP : Gabelli Value shareholders reject continuation (again)
If a full liquidation proposal is not passed,perhaps a rollover into another Gabelli fun with a cash at NAV(minus costs) alternative.
If ACG/Gabelli continues to frustrate the majority of shareholders wishes, any ambitions of raising capital in London will be much harder, if not impossible, as it would have irreparably damaged its reputation for managing money.
Agreed!