Bowleven’s Board inadvertently runs up the white flag

The last two desperate RNSs from Bowleven have been quite tragic. The current directors have franticly boasted that they’ve managed to enlist the support of three proxy advisors, who have each recommended shareholders vote against the resolutions at the forthcoming EGM. This will do nothing to influence the outcome of the vote. If anything it is an early admission of defeat.

Proxy advisors write research reports to help inform professional and institutional investors ahead of corporate votes. Such is the nature of corporate votes and their time constraints that proxy advisors have a limited window to compile their reports and don’t necessarily have the resources to do thorough research. Unless they are already familiar with the companies they are covering, their analysis can be superficial.

In the case of Bowleven it is highly unlikely the analysts working for the three proxy advisors that have recommended shareholders vote against all resolutions had even heard of the company two or three weeks ago.

One of the major problems facing any analyst who writes a report about an AIM-listed company is that doing a credible peer review is nigh on impossible, since the peers on AIM are more than likely going to be a group of veritable basket cases. AIM is not a fit for purpose market, which is exactly why the likes of Kevin Hart have been able to get away with squeezing such exorbitant remuneration from their companies for as long as they have. Unless an analyst can draw worthwhile conclusions from comparing one peer with another, his or her analysis becomes pointless.

Although Crown Ocean has not done the best job in promoting its message, anyone who has bothered to delve deeper into their proposals beyond a single phone call will appreciate how the resolutions at the EGM represent an infinitely better choice than sticking with the current bunch of value destroyers.

Another point to make about the analysis of proxy advisors is that their research is not meant for public consumption. It is a sign of desperation from Bowleven’s current board that it has resorted to publishing the conclusions. It also shows just how out of touch these directors are with ordinary shareholders.

The battle for Bowleven is more than likely going to be won or lost on the retail vote. According to shareholders who have been in touch with this site it seems that a large proportion of retail holders have already voted. It is impossible to believe they have done so in favour of Hart and his cronies. Today’s embarrassing blog in the FT’s Alphaville highlights why this is the case. According to Alphaville New Age’s CEO, Steve Lowden, “can’t actually remember the last time he had contact with Bowleven” and that the company is a mere “sleeping partner” in Etinde.

This contradicts ever so slightly the official propaganda from Bowleven, which the three supportive proxy advisors appear to have fallen hook, line and sinker for.

Ultimately none of this is going to make any difference. Broker deadlines for voting begin today. The vast majority of holders who planned to vote will have done so already. All we need to do now is wait for results a week on Monday.