Boussard & Gavaudan Holding requisitioned by Emmanuel Gavaudan

Boussard & Gavaudan Holdings (tickers BGHS and BGHL for its sterling and Euro share classes respectively) has announced that, on 10 June 2022, notice was served by Mr Emmanuel Gavaudan, requiring the company’s Board to convene a general meeting to consider the appointment of two additional directors nominated by him.

The board is satisfied with the current mix of skill and experience

The board says that, as stated in the in the Company’s annual financial report for the year ended 31 December, 2021, following a formal evaluation of the Board, the directors are satisfied that the current mix of skills and experience on the Board is appropriate to the requirements of the Company.

The board goes on to say that it has been advised by Guernsey legal counsel that the notice of requisition is valid and the board will therefore, on or before 1 July 2022, be issuing a notice convening an extraordinary general meeting for the purpose of considering the proposed appointment of the two additional directors. In the meantime the Board will consult with shareholders to seek their views on these proposed appointments.

Who is Emmanuel Gavaudan?

Emmanuel Gavaudan holds 1,500,000 of the company’s Euro-denominated shares. He is a principal of the Company’s Investment Manager and a member of the “Concert Party”, being the Investment Manager, together with persons considered to be acting in concert with the Investment Manager. The company says that, as at 31 March, 2022, the Concert Party owned 28.09% of its issued share capital.

[QD comment: We think that shareholders who own the remaining 71.91% of the company’s issued share capital should be very concerned by this development. The best investment companies have boards that are independent of, and are therefore prepared to challenge, their investment managers. When appropriate, a board should have the means and be prepared to fire an investment manager to make sure that they continue to act in all shareholders’ interests. It is hard to see how allowing Emmanuel to fill the board with his mates helps the overwhelming majority of shareholders, who are external to this concert party. At the time of writing, the Euro and sterling share classes are trading on discounts of 20.26% and 19.16% respectively, so there are clearly issues to address. Rather than going for a land grab, which will likely push these discounts out even further, the manager should be focusing on improving the fund’s performance, while simultaneously increasing its marketing efforts to raise awareness of the fund with potential investors. The current board should be commended on trying to maintain its independence and it is right to consult with other shareholders on these developments.]

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