M&G Investments and hedge fund Polygon Global Partners have answered the calls of ailing wealth manager WH Ireland which surprised the market with a £5m placing offer.
On Tuesday, less than a month after issuing a profit warning, the wealth manager said it required emergency funds in order to meet its capital adequacy requirements and warned that its operating losses would be “substantially higher” in the second half of the year.
News that WH Ireland was strapped for cash wreaked havoc on its shares, which closed on Monday at 64p before falling 42% lower at 37.04p per share on Tuesday.
But 10 minutes before trading closed on Tuesday the wealth manager announced it had raised gross £4.95m with major shareholders M&G and Polygon agreeing to enhance their stakes in the flailing business.
The swift turnaround allowed the firm to recoup some of its losses on Wednesday from the previous day with shares up 8% at 40p at the time of writing. However, they are down over 70% compared with a year ago.
The placing saw WH Ireland issue 11 million new ordinary shares at a price of 45p, a 30% discount to their closing mid-market price of 64p on 4 March.
Polygon, the largest shareholder, snapped up the largest portion, subscribing to 3.3 million shares, bringing its stake in the company to 29.8%. It was followed by M&G, which purchased an additional 1.9 million shares, boosting the fund group’s stake to 14.9%.
WH Ireland’s second biggest shareholder Oceanwood Capital Management did not participate.
The group’s directors, including CEO Philip Wale, also participated in Tuesday’s placing.
Wale purchased 32,500 shares, while chairman Timothy Steel took on 25,000. Head of wealth Stephen Ford, who only joined the company months ago, ponied up the cash to buy 111,000 shares or a 0.26% stake in the business.
Commenting on the emergency placing, Wale said: “We are delighted with the support from new and existing shareholders, who are committed to the next stage of the company’s growth and development and I look forward to updating shareholders as our plans for WH Ireland progress.”
WH Ireland has suffered from a litany of issues over the past year, losing several top senior figures and issuing multiple profit warnings. However it has been attempting to reverse course under Wale and former Brewin Dolphin heavyweight Stephen Ford, who was recruited in December to transform the business.
WH Ireland will assemble shareholders on 21 March to vote on the resolutions set out in the placing.
