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Brightside Group an appealing investment for Markerstudy

Two of the three founders of Brightside Group have substantially reduced their holdings in the company, paving the way for Gibraltar-based insurance group Markerstudy to take a major stake.
Brightside Group an appealing investment for Markerstudy

A new major shareholder on the books of Brightside (LON:BRT) marks the end of an era for the specialist insurer, but in many ways it is business as usual.

The group announced yesterday that long time business partner, Gibraltar-based insurance group Markerstudy, is taking a 9.3% stake, while two of the three founders of the company are substantially reducing their holdings in the business.

Markerstudy acquired 42.65mln shares from Brightside co-founders Arron Banks and John Gannon, with Banks selling 27.5mln shares and Gannon 15.2mln.

Gannon, who is currently Brightside’s commercial director, achieved an average price per share of 22.4p for his holding.

Following the transaction, Banks no longer has a notifiable interest in the shares of the company, while Gannon’s holding has been reduced to 2mln shares, equivalent to 0.44% of the issued share capital of Brightside.

Martyn Holman, chief executive of Brightside, said: "This investment strengthens the strong relationship between our companies and represents further industry support and recognition of our business model.”

The two companies have a previous business relationship, with Markerstudy providing a new underwriting facility last year to support Brightside’s eCar platform.

Holman told Proactive Investors that Markerstudy’s stake would not affect the business relationship between the two companies, and that other Brightside partners would continue to get a fair shake.

“Our placement strategy is not affected by this shareholding,” Holman responded, when asked if the transaction was likely to lead to more collaboration between the two companies.

“We’ve got a burgeoning relationship with them anyway. I’ve known them for years,” the chief executive continued.

“They made it clear a while back they would like a stake were one to become available, and with Arron [Banks] and John [Gannon] looking to cash out, that made it an easy conversation and everyone has ended up happy,” Holman said.

“I think they [Markerstudy] like the look of the numbers, the profit stream, the fact we are now a dividend paying stock, as well,” Holman explained.

Brightside announced a maiden dividend of 0.22p at the time of its interims, when it unveiled record results.

Despite the Gibraltar outfit taking a sizeable stake there was no question of Markerstudy seeking board representation. 

Holden will be looking for a replacement for Gannon as head of Direct Broking, with an announcement expected next week, “and I can assure you it won’t be anyone from Markerstudy,” he quipped.

Brightside also announced that its finance director, Paul Chase-Gardener, has had 6.87mln Brightside shares transferred to him in exchange for his shareholding in Rock Holdings. The transfer assumed a price of 22p per Brightside share, and gives Chase-Gardener 40.57mln shares in the company, equivalent to an 8.89% stake.

Chase-Gardener, the third founder member of Brightside, has resigned from all directorships of Rock Holdings and no longer holds any shares in the Rock Holdings group companies.

Shares in Brightside, which are up 18% over the last week, rose to a 52-week high of 25.52p today.

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Brightside Group Timeline

January 24 2014
September 18 2013

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