I am back. So is SGH, page-1622

Gekko, several in management own a significant number of shares. That would be Grech and Fowlie, in particular. But not too many others. At AR16, Cath Evans, for example, was shown as holding .4M shares, but she's no longer there. Evans had also previously stated that she had sold off her shares.

Take out the institutional holders (whether directly so or as nominees) and their 44M and you're left with 38M shares held by the rest of the Top 20, with the lowest qualifying total being Harry Hatch's 1,118,888.

Of the 38M T20 remainder amount, Cath Evans' 4M quantity has since been sold (based on her statements to the media late in 2016 /early 2017). This leaves 34M, most of which is tied up under the Shareholders Agreement arrangements of 2007 that continue to bind Grech (6.4M), Fowlie (5.1M) and Stephens (4.3M) together. That's another 16M shares which then leaves 18M shares held by others in the Top 20 most of whom are likely vendor holders and /or serving employees.


That said, there would be other holders (both vendor based and /or employee related) who might well still be holding their shares. As for any vendor shareholders still being escrowed, this is increasingly a marginal argument.

Most escrow arrangements would have ceased by now, with the most recent escrow releases being from Jan17 and Mar17 in respect of Pannone, STOB, Pickerings, Adroit, etc (so broadly within 2 1/2 years following original acquisition closures in each instance). If there are any still escrowed, they are probably limited to the WSW and Leo Abse Cohen acquisitions where the total equity consideration, at the time, was £3.7M (circa, $6M which at the time might have translated to ~1M new shares).

So, I don't quite see the depth of management, employee and /or vendor engagement in and continued holding of their shares as being quite that significant. Certainly, there are some but even if you took last year's Top 20 and considered it reflective of the real, underlying holding position, then there would be ~34M shares involved plus a further quantity in the 100,000 and over category. So, perhaps double the T20 number. If so, this would then put the "SGH own held stake" (for want of a better expression, at ~68M shares. Call it 70M which in rough terms gets to ~20% of the issued capital base.

Expressing this in another way, Grech & Co (assuming that they have the support of all the vendor shareholders, all the employee shareholders and all the remaining escrowed shareholders) might be able to influence and /or control 20% of SGH's shareholder base, but this would be at the upper /higher end of control expectations (not at the lower end). More likely, they could potentially control /influence a sub-15% shareholder range, primarily through their own held, retained or controlled shares (Grech, Fowlie and Stephens, for example, equals 15.8M shares or 4.5% of the overall issued share capital in SGH. To have any chance of having the upper hand in ongoing negotiations, etc, they would be needing to control, manage, influence or speak for >30% of the shareholding base. It is doubtful that they are even remotely near the required figures in this regard.

So, broadly:
* directly, Grech and Fowlie control, between them, 3.3%;
* as locked in executives under the 2007 shareholders agreement, they control (with Stephens), 4.5%;
* together with other executive /senior management and the board, they control ~5%;
* together with non-institutional T20 holders, they control <10%;
* extending this to all vendor shareholders, escrowed shares and employee shares, they hold upwards of 15% (but not much more than this). 20%, in this regard, would be very likely the ceiling limit.

The future therefore lies in the hands of others, not the least of which, are the secondary debt holders. Mind you, everyone might need to get a wriggle on here because, if Moelis is still around, then they need to get something sorted out fairly soon given that this morning, Moelis picked up the TEN gig (which is very likely indeed heading either for a massively dilutive CR, into VA or to a strategic sellout to a deep pocketed party, most likely to Foxtel depending on how they work through the media ownership regulatory framework).