‘Horrible and scandalous’: Reform UK’s Ben Habib under attack over £3m fundraise

Ben Habib’s property investment outfit has come under attack from an activist shareholder over a fundraise which could hand the former Reform UK deputy leader and its chairman greater sway over the company.

First Property, run by chief executive Habib, told the market last week it would launch an open offer to raise £2.96m through the issue of 36,960,777 shares at 8p a piece.

Open offers allow companies to sell stock to existing investors at a discount on their market value. As of the day before the fundraise morning, First Property’s shares traded on the market at around 16p per share.

However, the raise has been underwritten by Habib and chair Alasdair Locke, meaning they will be able to hoover up any unclaimed shares at a 50 per cent discount to their market value.

In a comment shared with City A.M., Swedish activist shareholder Peter Gyllenhammar, who quietly built a 25 per cent stake in the firm earlier this year, described the move as “horrible and scandalous” and said it could dilute existing investors.

“It is staggering that the [board of directors] and their advisor Allenby consider this to be prudent and in accordance with the best interest of the company and its shareholders and it is not good for the LSE market place when shareholders interest is treated accordingly,” Gyllenhammar said. 

“This type of behaviour is not acceptable in a sophisticated financial market but rather belong to more of a ‘back yard’ market place in my view.” 

First Property dismissed the criticism and said raising the new equity capital with a right of first refusal for shareholders ensures they could “participate on equal terms” and “if they participate, will not be diluted”. 

“We see this as a fairer way to raise money than an institutional raise that excludes private investors,” the spokesperson said.

The fundraise is open to shareholders until 18 September. Allenby declined to comment.