The UK’s biggest listed law firm today saw its share price drop 22% after announcing plans to raise £10m immediately.
The Gordon Dadds Group raised the money through an ’accelerated bookbuild’, allowing investors to buy shares at a discount.
According to a statement to the London Stock Exchange, the £10m fund is earmarked to give Gordon Dadds the financial flexibility to take ‘swift advantage’ of opportunities in the legal and professional services sectors. The company, which trades on the alternative investment market, said it closed the bookbuild within hours of it opening, saying it had been ‘well oversubscribed’.
But today’s activity had a negative effect on the markets, with shares dropping 22% to 147.50p.
The bookbuild shares were sold at a 26% discount on yesterday’s closing mid-market price of 189p.
The newly-placed shares represent around 24.8% of the group’s issued ordinary share capital following admission to the AIM in August 2017.
The company raised £20m at the time of its admission, with £14m designated for acquisitions. Since then Gordon Dadds has made five acquisitions, the latest of which was the purchase of top-50 firm Ince & Co at the turn of the year.
Directors believe there are other opportunities in the sector and ‘actively maintain’ an acquisitions plan which includes target businesses in Malta, Gibraltar, South Africa, China, Hong Kong and Bermuda, all of which would complement the international network.
The company says its acquisition strategy is now focused on firms with £10m or more fee income or with a complementary international business.
Following the successful placing of shares, Adrian Biles, chief executive, said: 'We are delighted to see such high quality institutional support for Gordon Dadds. This is an endorsement of the recent acquisition of Ince UK and the attractiveness of our business model and strategy for investors.'