SCOTTISH Equity Partners has emerged as the investor which acquired 6.63% of video-over-internet pioneer IndigoVision, a revelation that will fuel speculation it could help fund a takeover bid for the Scottish technology company by former IndigoVision chief executive Oliver Vellacott.
IndigoVision chairman Hamish Grossart has revealed that 22.9%-shareholder Mr Vellacott, who is now trying to oust Mr Grossart from the board, made three separate approaches in November to try to buy the company and take it off the stock market. These were rejected by the board as undervaluing IndigoVision.
Mr Grossart has since December 14 made three separate purchases of shares in Indigo-Vision, which has developed technology used in internet-based CCTV surveillance systems in airports, and was last night sitting on a paper gain of more than £73,000 on these transactions.
Glasgow-based SEP, a long-time supporter of IndigoVision founder Mr Vellacott which backed the technology entrepreneur ahead of IndigoVision's stock market flotation in 2000, has acquired its 6.63% stake through a company called Kuiper Limited.
Companies House filings obtained by The Herald show that Kuiper, which it is understood is owned by one of SEP's funds, was incorporated on August 30 this year. The company appears to have been set up through Scottish law firm Maclay Murray & Spens.
The timing and nature of its incorporation, given that it coincides with a period in which Mr Vellacott would likely have been considering and weighing up funding options for a buy-out of IndigoVision, suggests it may have been set up as a special purpose vehicle with a view to a bid for IndigoVision. SEP is a private equity house which puts up medium or long-term funding to back those who run businesses, as opposed to the type of investor which might speculate in the shares of a publicly-quoted company for short-term gain.
Mr Vellacott and SEP's stakes in IndigoVision together total about 29.5%. This is just below the level at which a single shareholder would be obliged to table an offer for the entire company.
SEP gave little clue about its intentions yesterday, but it did, in a statement confirming it was behind the purchase of the 6.63% stake in IndigoVision, emphasise its support for Mr Vellacott.
A spokeswoman for SEP said: "Scottish Equity Partners can confirm it has made an investment in IndigoVision. We were early investors in the company and have a high regard for Oliver Vellacott. We are long-term investors in technology and technology-related businesses and recognise the importance of supporting companies in Scotland."
Shares in IndigoVision ended 22.5p, or 8.57%, higher at 285p yesterday as SEP's name and possible intentions became a hot topic on shareholder message boards including The Motley Fool. This rise in the shares raised the stock market worth of Indigo-Vision by £1.7m to £21.5m.
IndigoVision chairman Mr Grossart told The Herald last Friday that he had received three management buy-out proposals from Mr Vellacott that would have taken the company private, valuing it at 225p, 248p and 265p-a-share. Mr Vellacott's departure from IndigoVision was announced on December 9. Mr Vellacott's claim that he was dismissed is disputed by Mr Grossart.
A search of Companies House filings gives little clue on those behind Kuiper Limited, listing its investors as Vindex Limited and Vindex Services Limited which in turn have as their shareholders Maclay Murray & Spens and Vindex Trustees Limited.
However, Kuiper's stock market notification yesterday of its purchase of the 500,000 shares, from Seattle-based Archon Capital Management last Friday for a price likely to have exceeded £1.25m, included SEP general counsel Andrew Buchan as the contact name and listed SEP's switchboard number.
IndigoVision revealed on December 13 that Mr Vellacott had requisitioned a general meeting to vote on resolutions to remove Mr Grossart and non-executive director and former Scottish Conservative party chairman Andrew Fulton from the board. Mr Vellacott is seeking election to the board with allies Sir Peter Burt, former chief executive of Bank of Scotland, and Waverley Cameron, a member of the Edinburgh stationery dynasty.
Asked about SEP's purchase of the shares sold by Archon, a spokesman for Mr Vellacott said: "Oliver remains focused completely on the forthcoming shareholder meeting. He would hope that anyone investing in the company would share his vision for IndigoVision and give him their support."
A statement by IndigoVision to the stock market yesterday revealed Mr Grossart bought a further 10,000 shares in the company at 255p each on Tuesday, at a cost of £25,500, to take his stake to 5.5%. Mr Grossart had last Friday raised his stake in IndigoVision to 5.4% by paying £58,581.25 to purchase 22,750 shares at 257.5p each.
The company disclosed last Thursday that Mr Grossart had nearly doubled his stake to 385,500 shares, or 5.1%, on December 14 by buying 185,000 shares at 250.5p each, at a cost of £463,425. The 217,750 shares purchased by Mr Grossart in these three transactions were last night valued at £620,587.50. These shares cost a total of £547,506.25, meaning that Mr Grossart is currently showing a paper gain of £73,081.25 on these purchases.
Mr Vellacott's spokesman told The Herald last night: "The chairman (Mr Grossart) was made aware of SEP's shares purchase on Saturday, and we note that he continues to buy shares in the market. The appropriate place for the company to communicate with shareholders is through the stock exchange."
Asked about this remark, a spokesman for Mr Grossart declined to comment.
The jump in IndigoVision's share price yesterday increased the value of Mr Vellacott's stake by about £388,000 to £4.92m.
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