Floating law firms rarely benefit staff but those at top of the pyramid never seem to suffer.. here’s yet another example.
The Law Society Gazette
hares in listed firm Knights continued to nosedive today – as it emerged that hundreds of staff have sought to buy a stake in the company for well above the market rate.
By Wednesday’s close the shares had lost another 20% in value and were trading at 144.5p. This followed shares almost halving in value on Tuesday following a profit warning for the financial year. Shares have lost 70% of their value from 414p just two months ago.
Meanwhile, Knights today announced that 524 employees have elected to take part in the group’s save as you earn scheme this year, taking options over more than 1.4m shares.
Eligible staff were invited to apply for options at an exercise price of £2.96. This was set at a discount of 20% to the closing price of £3.70 on 21 February. The options have a contract start of 1 May and are exercisable from 36 months thereafter.
Staff who elected to join the scheme have not purchased any shares yet and can come out of the scheme at any time during the three years and take back their cash. This can even be done immediately following the first payment. Once they have made 36 payments into a ringfenced savings account, staff can decide whether to purchase the shares at £2.96 or take their money back.
Knights has developed a reputation in recent years for rapid growth and multiple acquisitions of firms outside London. This expansion appears to have been checked by the latest financial projections, which showed that the impact of Covid-19 has hit profits for the year ending 30 April.
Chief executive David Beech said yesterday: ‘Following a good first half, it is frustrating that recent events have held the business back from delivering a stronger performance in the second half.
‘Beyond this near-term uncertainty, the opportunity to cement our leading position in key legal services markets outside London remains substantial and we are as well placed as ever to deliver on that opportunity.’
Beech last year sold 15.7m of his shares at a price of 390p to recoup £61m in total. His remaining holding at the time was 16.8m shares, meaning his stake has lost around £36m in value this week.
