Lush files complaint with FCA about ex-CEO’s sale of company shares

Published: 16-Mar-2023

The retailer has allegedly filed a complaint to the City watchdog about former director Andrew Gerrie’s sale of company shares to Silverwood Brands

Lush has reportedly filed a complaint to the Financial Conduct Authority (FCA) about ex-CEO Andrew Gerrie as a dispute over the sale of company shares continues.

According to The Telegraph, the beauty retailer’s alleged filing to the City watchdog and Aquis Stock Exchange claims Gerrie misled the stock market about the viability of the transfer of his Lush shares.

The complaint is the latest development in the row between Lush and its former director over a 19.8% stake in the company

Gerrie, who left Lush in 2015 after 20 years at the helm, is trying to get the transfer of his shareholding in the retailer to investment firm Silverwood Brands (of which he is Executive Director) approved.

In December 2022, Silverwood Brands announced it had acquired a stake in Lush, buying Gerrie and his wife Alison Hawksley’s shares in the company for £216.8m. 

Last month, Lush declined to record the sale.

It stated it violated the company’s articles of association, which enables existing shareholders to buy up shares of the company that are put up for sale.

In a release put out on 3 March, Lush said its reasons for refusing the transfer included that “the interests in the shares offered to Silverwood did not match those previously offered to the remaining shareholders” and that “the price paid for the shares is required to be paid in cash”.

It also stated that “the separation of legal and beneficial interests in the shares as affected by the transfer, with the beneficial ownership being transferred to Silverwood and the legal ownership being transferred to a subsidiary of Silverwood, is not permissible”.

In addition, the company said that the value of the shares issued to Gerrie and Hawksley “was not the same as or more than the prescribed price required under the articles”. 

Silverwood Brands, however, claims that at the time of the deal, it acquired the shares for “the applicable minimum prices” that Lush’s articles of associations would allow.

The investment firm also claims Lush’s letters of notification failed to provide reasoning and its solicitors are seeking further clarification.

Silverwood Brands is a firm that invests in consumer companies in the wellness, lifestyle and leisure sectors.

Last year, the London-based company acquired nail care brand Nailberry for £6m.

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