English winemaker Gusbourne has received the go-ahead from its board to delist from the stock market and go private.
The idea was first initiated by majority shareholder and former Conservative politician Lord Ashcroft earlier this month.
The board said there is a “considerable cost and management time and legal and regulatory burden” linked to keeping its AIM listing, and these were “disproportionate” to the benefits.
By delisting, it argued the company could save at least £250k a year.
The board also raised concerns over a lack of liquidity on the AIM, concluding it does not give shareholders the opportunity to trade in “meaningful volumes or with frequency within an active market”.
This negatively effects Gusbourne’s market valuation, it argued, with knock-on effects for the company’s status within the industry, its perception among staff and customers, and its ability to raise financing.
It said Gusbourne could make quicker decisions if it was private.
Should the delisting occur there will be several changes to the board, with non-executive chairman Jim Ormonde, and non-executive directors Ian Robinson, Lord Arbuthnot and Simon Bradbury to step down.
A general meeting of shareholders will be held on 7 March to vote on the move. If passed, Gusbourne will be delisted on 19 March.
Ashcroft initially opened discussions with the Gusbourne board in July to explore a possible sale of his 67% holding in the business.
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