INVESTORS who bought one £230 share in craft beermaker BrewDog’s first crowdfunding round are now sitting on a total shareholding worth £6,590, representing a rise in value of 2,765 per cent in seven years.
The Ellon-based brewer, which has been valued at £1 billion after selling a 22.3 per cent stake to US private equity house TSG Consumer Partners, has confirmed to its investors that their shares are now worth £13.18 each.
While that is considerably lower than the £230 that over 1,300 people paid for a share in 2010, the overall value of the holding has risen while one share has become 500 in the intervening period.
This is because when BrewDog launched its Equity for Punks II fundraising in 2011 one existing share divided into ten before every share then split into five as part of Equity for Punks IV in 2016. Every share held in the company has now been divided into ten as part of the TSG investment.
In a letter to shareholders BrewDog co-founder, chairman and self-styled captain James Watt, who has made over £50 million by selling nearly a third of his shares to TSG, said that as the company’s “significant shareholders have realised some of their initial investment” the board wants to extend the same opportunity to other investors.
However, while the company is allowing shareholders to sell up to 15 per cent of their equity value, which would be £988.50 for someone who bought one share in 2010, it has capped the number of shares that can be sold at 40 per investor.
This means the maximum that can be realised at this point is £527.20, which would be reduced to £514.70 when a one-off dealing charge of £12.50 is factored in.
Someone who invested the minimum allowed via Equity for Punks II, when four shares were sold for £95, would now be sitting on a shareholding worth £2,636 and would be able to cash in £395.40.
Those who invested £95 for one share in the company’s third fundraising will now own 50 shares valued at £659. If they sold 15 per cent of that they would receive £98.85 minus fees.
Those who took part in Equity for Punks IV, meanwhile, will have paid £95 for two shares, which will have increased in value by 178 per cent to £263.60. Selling 15 per cent of that would realise £39.54, which would be reduced to £27.04 once the charge is applied.
If all eligible shareholders sell their maximum allowance BrewDog will pay out in the region of £9.2m.
Although the business is allowing shareholders a partial exit, Mr Watt said it remains committed to the crowdfunding model and is looking to launch a further fundraising in the near future.
“That community element is key to the business and we want to continue to build that community in the UK and internationally,” he said earlier this week, adding that the firm’s co-called equity punks are “the heart and soul of our business”.
Anyone looking to sell some of their shareholding must let the company know by Friday April 21 and all shareholders are being urged to back a resolution recommending the tender offer goes ahead.
BrewDog prides itself on offering shareholder value via discounts on beer and running an AGM that takes the form of a music festival rather than shareholder meeting.
It is therefore offering all investors who do not want to take part in the tender offer either six cans of a yet to be brewed “Vermont styled IPA” or a £10 voucher to be spent in its bars or on its website.
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