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InterQuest – failed-buyout management now seek increased authority to allot shares… What for?

By Steve Moore | Tuesday 14 November 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

I previously wrote on InterQuest (ITQ) last month; return from suspension… but, with its management shysters, for how long? Today brings a “Notice of General Meeting” announcement…

This is of it to hold a general meeting on 30th November, with a circular to be posted today and “will be available on the company's website shortly”. Hmmm. There does though follow an extract from the circular, this including;

“The purpose of the meeting is to extend the director's authority to allot shares from one third of the issued share capital of the Company as currently authorised pursuant to the Annual General Meeting held on 23 May 2017 to 75 per cent. of the current issued share capital of the Company. The purpose of which is to authorise the directors so that they may have flexibility to issue shares in the case that these are required as part of any future acquisitions or other dealings.”

Hmmm - this from a management which has tried a buyout on the cheap and previously threatingly vaguely stated “shareholders are reminded of the resolutions approved at the company's annual general meeting on 23 May 2017” in an update alongside “the executive directors, being Gary Ashworth, Chris Eldridge and David Bygrave, continue to believe that InterQuest would benefit from the cancellation of trading in its shares on AIM and re-registration as a private company and will continue to look for ways to achieve this”.

I’d thus suggest there justifiable concern regarding the potential impact of the proposed resolution. It has been announced that there is “a relationship agreement to ensure that the company is managed for the benefit of the shareholders independently of (management buyout vehicle) Chisbridge” and currently I hold and continue to consider the shares materially undervalued on a fundamentals basis. However, all of the above means it certainly currently much safer to be out of this.

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