A2's Babidge sitting on 730% return after settling partly-paid shares worth $4.98m
A2 Milk Co [NZX: ATM] managing director Geoff Babidge is sitting on a 730% capital gain after settling the outstanding amount due on six million partly-paid shares he received five years ago.
Mr Babidge received board approval on July 24 to pay up the remaining $594,000 owing on the partly-paid shares that were issued at a price of 10c a share in August 2010 as part of his long-term incentive package. At A2's current trading, those shares are worth $4.98 million. Babidge had until August 25 to pay the balance owing.
A2 expects to report annual earnings in late August. The company has a blackout policy on restricted persons trading the company's shares from the end of the financial year until the day after it formally announces the result to the market, though waivers can be granted.
At the time Mr Babidge was issued with the partly-paid shares, the then NZAX-listed stock was trading at 8.6c apiece, meaning shareholders who have been with the company over the same period have seen an 865% capital gain, outpacing the 53% increase in the S&P/NZX All Index.
In 2013, Mr Babidge took advantage of the jump in A2's share price, selling four million shares at 70.5c apiece. Those shares were part of his 2010 long-term incentive scheme, priced at 10c each.
On July 20, A2 provided a trading update, saying it had turned down a potential takeover bid by cornerstone shareholder Freedom Foods Group and US food and beverage firm Dean Foods, which some Australian media reported could be as much as $2 a share. The milk marketer said the offer wasn't compelling enough for the board to recommend, although it was open to the consortium trying again, and said other potential suitors had emerged.
The A2 boss has another five million partly-paid shares priced at 64c each. The 11 million shares held on trust by GCAA Investments Pty give Mr Babidge about 1.7% of the company.