This article is from the Australian Property Journal archive
SEVEN shareholders in McGrath have cashed out of the listed real estate agency for a heavily discounted price.
In a statement to the ASX announcing the release of certain shares from voluntary escrow, McGrath announced that the seven shareholders including current and ex-McGrath agents, representing 14.66% or 20.44 million shares, have sold their interest to a number of institutional investors via a block trade, at a price of 65 cents per share.
The sale price is a discount to the 77 cents trading price as at September 06 – the time they announced their intentions to cash out of the agency.
It is significantly below the $2.10 price issued to them by McGrath at the time of float in December 2015.
News of the sale sent McGrath shares falling, closing 5.5 cents lower at 67 cents yesterday – valuing the company at $93 million – well below the value of $290 million at the time of listing.
Combined they were the second largest shareholder behind founder and property guru John McGrath who still has a 27% interest.
McGrath cashed part of his interest in the company during the float and collected a cool $37.4 million.
Had the group of seven cashed in at the time of the float like founder McGrath, they would have pocketed $42.92 million compared to $13.28 million they collected yesterday.
The group includes:
- Geoff Lucas, McGrath’s former chief operation officer who quit last year to take up a role with NSW artisan bread maker Sonoma,
- Ben Collier, McGrath’s number one agent, who quit in December to join rival, The Agency,
- Bethwyn Richards, currently still a partner in McGrath’s Edgecliff agency,
- Shad Hassen, a former partner in McGrath’s Edgecliff agency, who also quit to join The Agency,
- Steven Chen, who established McGrath’s project division and jumped shipped to The Agency,
- And former McGrath director Matthew Lahood and Sydney agent Brad Gillespie, who also joined The Agency.
The group’s decision to cash out of McGrath comes after the firm revealed a 42% fall in full year profit to $4.9 million.
In addition, McGrath’s market share (3.4%) continues to lag behind LJ Hooker (4.5%) and Ray White (8.5%).
In New South Wales, McGrath’s home turf, its market share has declined from 7.1% to 6.7%, however its market share has risen in Queensland from 1.7% to 2.1%, ACT from 4.3% to 5.3% and Victoria from 0.1% to 0.6%.
Australian Property Journal
