Stobart Group denies property probe claim

Carlisle, UK: Stobart Group yesterday denied allegations in the Daily Telegraph that the Financial Services Authority was examining a deal in which the British transport and distribution company will buy property from its chief executive.

“The company believes the content of the article to be entirely false,” Stobart says in a statement to shareholders. “The company and its directors have not been contacted by any of the authorities referred to and is confident that there is no inquiry.”

The Financial Services Authority declined to comment and Stobart is considering legal action against the newspaper.

Stobart Group announced last month that it proposed to buy the Westbury property portfolio from WADI Properties, a company controlled by Andrew Tinkler and his brother-in-law William Stobart, the group’s chief operating officer. They purchased the portfolio for $227m (£140m) four years ago when Stobart floated on the stock market via a reverse takeover of the Westbury Property Fund. The portfolio value has fallen since then and the buy-back could be for as low as £70m according to the Financial Times.

Stobart shares tumbled 6p to 127p that could make for difficulties in its planned £115m share placing. Eddie Stobart announced the rights issue last month as part of a restructuring of the business that will allow it to develop its Stobart estates property portfolio, including the Westbury purchase, and positioning itself as an integrated transport and distribution service provider.

It will raise the money through the sale of 77,339,766 new shares by a placing and open offer priced at 155p per share. Stockbroker Cenkos has conditionally placed the shares, Stobart says.