It’s a second victory for the Hiranandanis, the promoters of the AIM listed real estate company, Hirco Plc. as the company’s activist shareholder - Laxey Partners has exited its investment in the company by selling its entire stake to HSBC.
Laxey has sold its entire 11.63% stake or 8,896,513 Shares in the company at a price of 95 pence per share for a total consideration of 8.72 million pounds (Rs 68 crore). Post the transaction, HSBC’s stake in the company has gone up to 21% from its initial holding of 9.9%.
According to a report in Business Standard, Laxey Partners was not comfortable with the company’s idea of merging Hirco Plc with their developer. Laxey has exited its investment in Hirco as it had got sufficient returns on its investment.
In May this year, in the company’s extraordinary general body meeting, Hirco Chairman Niranjan Hiranandani tasted his first victory against Laxey partners when 60% of the shareholders voted against Laxey’s proposal to remove three Hirco directors and replace them with its own nominees.
In the beginning of the year, the activist investor had demanded a non-Hirnandani chairman for Hirco. Laxey wanted Hirco to change three of its directors and install an independent chairman instead. Laxey had proposed to bring in four independent directors on the board including Andrew Pegge, Laxey co-founder, and Laxey executives Michael Haxby, John Bourbon and Aled Rhys-Jones.
Hirco also had to shelve its plans to merge its real estate projects (township developments at Panvel near Mumbai and Chennai) and Hirco Developments, a development firm, with its investment arm Hirco due to a strong opposition from Laxey Partners. Laxey cited that the merger would dilute their interest and in turn effectively cede control to the Hiranandani family.