An Open Letter to Shareholders of accesso Technology Group plc

Subject: An Open Letter to Shareholders of accesso Technology Group plc
From: Individual Investor
Date: 2 Feb 2020

The time has come for shareholders to stand up for shareholder interests.

As per regulatory filings, accesso launched a formal sale process on 24 July “following the receipt of approaches from a number of parties regarding a potential sale of the Company.” [1] The Board expressed its opinion of refreshed indications of interest on 15 October, [2] then provided further update on 13 November. [3] However, the Board decided to end the process on 23 January. [4]

Throughout, the Board’s choice of words on the matter has been unsatisfyingly non-specific. As a result, shareholders don’t have a clear of idea of what was proposed, what was demanded, or how far apart the sides were.

The vagueness of the Board’s statements allows shareholders to wonder: Is there a difference of opinion between “a value the Board considers attractive to shareholders” and a value the shareholders consider attractive to themselves?

I write to you as an individual investor/long-time shareholder with less than 1% of shares. To those of you who are actively-managed funds, I write to remind you of your power. As you can see towards the bottom of accesso’s IR page, actively-managed fund families have the most skin in the game; and the Board holds less than 3% of shares. [5] Any 5% shareholder has the ability to propose whatever shareholder resolutions it sees fit.

Shareholders deserve significant transparency with regards to why a “high level of inbound interest” did not “translate into an offer or offers on terms which the Board would be prepared to recommend to accesso shareholders.” Shareholders must ensure that shareholder interests supersede management self-preservation.

If the Board cites a wide difference, in its opinion, between accesso’s share price and its true value, will continuing to spend $30-something million per year on research and development be a better use of that money than a share buyback?

In light of the share price decline that accompanied the 15 October announcement (790p to 658p on the day; “…The Company and its advisers have now received refreshed indications of interest from a number of the interested parties, none of which are at a level that the Board feels offers sufficient value to shareholders…”) and subsequent share price declines (below £4), are shareholders better served by re-engaging with outside parties?

Some of you meet with the company during the course of company visits, investor conferences, and the Annual General Meeting, traditionally in May. Don’t allow management to think the little/no shareholder pushback they experienced when share price was rising can continue indefinitely after the share price has fallen.