Shares fall

SMS founder leads opposition to KKR’s £1.3bn takeover

Alison and Steve Timoney
Steve Timoney, centre, set up SMS 30 years ago

Steve Timoney the founder of Smart Metering Systems, and its former chief executive Alan Foy, have joined a long term shareholder to oppose the £1.3 billion offer for the company by US private equity firm Kohlberg Kravis Roberts.

Mr Timoney, who stands to make £51 million from the acquisition, together with Mr Foy and PrimeStone Capital, collectively control 23,827,659 ordinary shares representing approximately 17.8% of SMS’s issued share capital.

In a statement they said they are “disappointed” with the 955p cash offer, announced on 7 December, and intend to vote against it.

The price offered is a 40.4% premium to the closing price of 680p on 6 December and is being recommended by the SMS board and he deal implies an enterprise value (equity and debt) of approximately £1.4 billion.

The shares soared by 41.2%, or 280p, to 960p after the offer was announced. After today’s announcement they closed 40p (4.18%) lower at 918p. A vote is due on 9 January and needs 75% backing to be approved. KKR and SMS have not commented on the opposition statement.

Mr Timoney, a hotelier and basketball club owner who grew up in one of Glasgow’s most deprived areas is due a huge payday from the business he set up almost 30 years ago.

SMS was floated on the Alternative Investment Market and he made £15m from offloading part of his stake.

He later stepped down from the company but he retained more than five million shares in the business.

SMS, which employs about 1,500 staff, installs, owns and manages smart meters on behalf of energy companies, housebuilders, retailers and social housing providers. It also develops and operates battery energy systems to store clean energy as Britain aims to quadruple its storage capacity by 2030.

Schedule of holdings:

NameNumber of shares% of issued share capital
PrimeStone Capital LLP13,075,1149.79% 
Metis Investment Management Ltd4,680,8513.50% 
Metis Investments Ltd372,3500.28%
The Metis Trust715,0000.54%
Lochlane Investments Limited4,984,3443.73%

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