Investment group ups stake and war of words

Harwood Capital has increased its stake in utility group Fulcrum and increased the likelihood of the fractious relationship deteriorating further.

The investment group is not taking a backward step after its initial offer last month to substanitally increase its holding in the Sheffield business was rejected as an “opportunistic manoeuvre”.

It had sought to invest £14m in increasing its stake to 29.9%.

This morning Harwood announced it had acquired 2.8m shares on the open market. The latest purchases has raised its holding to 11%, nearly double its position before it made the tender offer.

These latest share purchases further reduce the scale of that tender offer.

But Harwood claims that Fulcrum’s directors are being an “impediment”, leaving shareholders “frustrated”.

It pointed to the board’s “refusal to distribute” the tender offer documents and the “cumbersome mechanism” that has been put in place for shareholders to receive information.

Harwood also believes Fulcrum “is demanding a wholly unreasonable indemnity” before contact details of shareholders will be released.

It has not ruled out further on-market share purchases to further reduce the scale of its tender offer.

Harwood wants to propose delisting of Fulcrum from Alternative Investment Market (AIM) and will look to appoint directors to the firm’s board.

Its proposed appointees include Jonathan Turner, the chief executive of Bayford Group and owner of Bowcliffe Hall.

Fulcrum’s share price closed on Thursday night at 27p, valuing the company at £60m.

However in mid-March its share price had hit 13p – its lowest point in more than four years and 75% below its peak two years ago – before a general market improvement and, more significantly, Harwood’s offer boosted the price back above 25p.