Shares for the future: how I navigated my trading dilemma
Analyst Richard Beddard discusses his delisting dilemma over a long-term investment, and some benefits and risks of family owned businesses.
8th August 2025 15:00
by Richard Beddard from interactive investor
This is an obituary I did not expect to write. Subject to a shareholder vote, Share Sleuth favourite Dewhurst Group (LSE:DWHT) will delist. The news leaves long-term shareholders with painful choices.
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Dewhurst: delisting
The delisting is all but nailed on. It needs a special resolution to pass at a general meeting, which will be held on 21 August.
A special resolution requires a 75% vote. The Dewhurst family has 64.1% of the vote and it has secured another 10.1% from non-family directors and a shareholder. That means 74.2% of the votes are already committed irrevocably, which leaves only 0.8% to be secured.
Sometimes in these situations shareholders have a straight choice to make, either to sell before the shares delist, sometimes in a stampede, or become a minority shareholder in an unlisted firm.
Retaining shares in an unlisted firm
The reason for retaining the shares is they are very likely undervalued. But Dewhurst shares have always been difficult to trade, and the delisting makes realising that value harder.
The shareholder base will shrink further, meaning even fewer buyers and sellers. Shareholders who want to buy and sell will be matched up via their brokers on an ad-hoc “matched bargain” basis through JP Jenkins, a platform for trading unlisted shares. There is no guarantee this mechanism will be available in perpetuity.
Retaining the shares could also be disconcerting because unlisted companies are not subject to the same level of scrutiny and regulation as listed firms. Trades can be few and far between and the last reported share price, if there is one, may not be anywhere near what is achievable. It can feel like the company has disappeared from view.
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My only experience of holding shares through a delisting was hair-raising. The company recapitalised and I completely lost track of how many shares I owned. Years later it re-emerged as an Over The Counter (OTC) stock in the US and I sold my shares, doubling my money. I counted myself very lucky. The anxiety was not worth the discomfort.
Dewhurst is such a well-established firm, I cannot imagine this level of shenanigans, but the fact is we do not know what will happen in future. Anyone considering retaining a shareholding should consider section 4 of the circular published on the company’s website carefully.
Selling shares before a delisting
The alternative, selling Dewhurst shares, comes at a considerable cost, though, due to Dewhurst’s illiquidity. On Monday, the quoted sell price of the ordinary shares was 750p and the buy price was 875p.
There is a third option, giving us time to think. Dewhurst has offered shareholders a partial, or perhaps total, get-out, sweetening the pill somewhat by tendering for £25 million worth of shares at a price of 900p for the ordinary shares and 665p for a second class of non-voting A Shares.
The prospect of the tender offer, which spares shareholders trading costs and the wicked spread, is probably what has stopped the share price sliding so far.
The problem is £25 million may not be sufficient to satisfy all sellers. It depends on how many shares are tendered.
The company guarantees a “Basic Entitlement” of about 0.47 shares for every share tendered for the ordinary shares and about 0.82 shares for every A share.
In other words, if shareholders tender all their shares, they may still be left with up to about 50% of them, if they are ordinary shares, and up to 20% of them, if they are A shares.
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The tender offer closes on 28 August, so it will be possible to sell any shares that the company did not buy before the last day of trading two weeks later on 10 September. But since there will be other people in the same position, concerted sales may be driving the share price down.
I hate these situations because they turn us into traders, but this is what I have decided.
Share Sleuth, which is a virtual portfolio of listed shares, holds the ordinary shares. I cannot simulate holding an unlisted firm, so I cannot risk simulating the tender and be left holding shares once they have delisted.
I could simulate the tender, and then simulate the forced sale of the leftovers once the outcome of the tender offer is known, but that is more aggro and the portfolio might be worse off than if I take the hit by simulating a sale now.
Hence, on Monday, the day of the announcement, I decided to liquidate Share Sleuth’s holding of 938 shares. The actual price quoted by a broker was 790p, 110p below the tender offer, and I have also charged the portfolio £10 in lieu of broker fees. That is the price of certainty, and an easy life. The trade netted the portfolio £7,400.
The disposal was a wrench, and not just because of the cost. Dewhurst was one of a handful of original members of the Share Sleuth portfolio in 2009. Jet2 Ordinary Shares (LSE:JET2) and Games Workshop Group (LSE:GAW) are the only shares to outlast it.
Personally, I own both the ordinaries and the A shares. As a writer for interactive investor, I am bound not to trade within a week either side of the publication of this article, so my decision will depend partly on the circumstances then.
I may well tender my shares. Most of them are A shares, so the tender will mop up at least a substantial majority of them.
If there are leftovers, I will have to see how much I can get for them once the tender is complete. If the price is humiliating, I may be prepared to go into the dark once again, albeit with a pretty small holding.
Postscript: anatomy of a trade
Judging by the filename of the circular, the delisting plan is codenamed Project Medici. Presumably it is named after the powerful Florentine family whose wealth lasted for centuries.
It is apt because it is the Dewhurst family’s holding that makes the delisting possible. I have lived with the possibility it might happen for 16 years, because family ownership also confers benefits. Family owned businesses are often run for the long term.
Past performance is not a guide to future performance.
There are other family controlled firms in the Share Sleuth portfolio. Generally, I have taken the view that the benefits outweigh the risks, particularly when companies have long co-existed with minority shareholders on the stock market.
One sequence of trades does not tell us much, but my Dewhurst trade is not an obvious victory. It is notable for a particularly timely reduction during a share price spike I still wonder about in 2021, and for a less well-timed addition in 2024.
Share Sleuth tells me Dewhurst netted the portfolio a return of 297% including dividends and fees, which is just over 9% annualised. I would describe it as an average return for a long-term investment.
Oddly, although I did not penalise Dewhurst’s score because of its concentrated shareholdings, I did penalise the score of Thorpe (F W) (LSE:TFW) in October last year, even though its ownership is slightly less concentrated than Dewhurst’s.
When I review the other family controlled firms in the portfolio, I need to be more consistent about where I stand on this issue.
22 Shares for the future
Dewhurst is now a special situation, so I have removed it from the Decision Engine.
Here is the ranked list of shares. I review the scores at least once a year, soon after each company has published its annual report. The price scores are calculated using the share price prior to publication.
Generally, I consider shares that score more than 7 out of 10 to be good value. Shares that score 7 or less are good businesses that are not obviously cheap at the moment.
Volution Group (LSE:FAN) and Goodwin (LSE:GDWN) have published full-year results, and I expect to rescore them when they publish their annual reports.
Keystone Law Group Ordinary Shares (LSE:KEYS), Games Workshop, Latham (James) (LSE:LTHM) and Jet2 have published annual reports and are due to be re-scored.
company | description | score | qual | price | ih% | |
1 | FW Thorpe | Makes light fittings for commercial and public buildings, roads, and tunnels | 8.5 | 0.1 | 7.1% | |
2 | James Latham | Imports and distributes timber and related products | 7.5 | 1.0 | 7.0% | |
3 | Howden Joinery | Supplies kitchens to small builders | 8.0 | 0.5 | 7.0% | |
4 | Focusrite | Designs recording equipment, loudspeakers, and instruments for musicians | 7.0 | 1.0 | 6.0% | |
5 | Oxford Instruments | Manufactures scientific equipment | 7.0 | 1.0 | 6.0% | |
6 | Bunzl | Distributes essential everyday items consumed by organisations | 7.5 | 0.5 | 6.0% | |
7 | Renishaw | Whiz bang manufacturer of automated machine tools and robots | 7.5 | 0.5 | 5.9% | |
8 | Solid State | Manufactures electronic systems and distributes components | 7.0 | 0.9 | 5.8% | |
9 | Macfarlane | Distributes and manufactures protective packaging | 7.0 | 0.9 | 5.8% | |
10 | Hollywood Bowl | Operates tenpin bowling and indoor crazy golf centres | 7.5 | 0.4 | 5.8% | |
11 | Anpario | Manufactures natural animal feed additives | 7.0 | 0.8 | 5.5% | |
12 | James Halstead | Manufactures vinyl flooring for commercial and public spaces | 7.0 | 0.8 | 5.5% | |
13 | Renew | Repair and maintenance of rail, road, water, nuclear infrastructure | 7.5 | 0.2 | 5.4% | |
14 | Jet2 | Flies holidaymakers to Europe, sells package holidays | 7.5 | 0.2 | 5.3% | |
15 | Porvair | Manufactures filters and laboratory equipment | 8.0 | -0.4 | 5.2% | |
16 | Churchill China | Manufactures tableware for restaurants etc. | 6.5 | 1.0 | 5.0% | |
17 | Softcat | Sells hardware and software to businesses and the public sector | 8.0 | -0.5 | 4.9% | |
18 | Bloomsbury Publishing | Publishes books and educational resources | 7.5 | -0.1 | 4.9% | |
19 | Games Workshop | Designs, makes and distributes Warhammer. Licences IP | 9.0 | -1.6 | 4.8% | |
20 | YouGov | Surveys and distributes public opinion online | 7.5 | -0.3 | 4.4% | |
21 | Advanced Medical Solutions | Manufactures surgical adhesives, sutures and dressings | 6.5 | 0.7 | 4.4% | |
22 | Judges Scientific | Manufactures scientific instruments | 7.5 | -0.4 | 4.1% | |
23 | DotDigital | Provides automated marketing software as a service | 6.5 | 0.4 | 3.7% | |
24 | Auto Trader | Online marketplace for motor vehicles | 8.0 | -1.2 | 3.6% | |
25 | 4Imprint | Customises and distributes promotional goods | 8.0 | -1.3 | 3.4% | |
26 | Dunelm | Retailer of furniture and homewares | 8.0 | -1.5 | 3.0% | |
27 | Volution | Manufacturer of ventilation products | 8.0 | -1.6 | 2.9% | |
28 | Keystone Law | Operates a network of self-employed lawyers | 7.0 | -0.7 | 2.7% | |
29 | Quartix | Supplies vehicle tracking systems to small fleets and insurers | 7.5 | -1.6 | 2.5% | |
30 | Goodwin | Casts and machines steel. Processes minerals for casting jewellery, tyres | 8.0 | -2.5 | 2.5% | |
31 | Tristel | Manufactures disinfectants for simple medical instruments and surfaces | 7.5 | -2.1 | 2.5% | |
32 | Cohort | Manufactures military technology, does research and consultancy | 7.5 | -2.1 | 2.5% |
Click on a share's score to see a breakdown (scores may have changed due to movements in share price). Key: qual is the share’s score out of 9 for the three quality factors (capabilities, risks, and strategy), price is the price score from -3 to +1, and ih% is the suggested ideal holding size as a percentage of the total value of a diversified portfolio.
Richard Beddard is a freelance contributor and not a direct employee of interactive investor.
Richard owns Dewhurst and many shares in the Decision Engine. He weights his portfolio so it owns bigger holdings in the higher-scoring shares.
For more on the Decision Engine, please see Richard’s explainer.
Contact Richard Beddard by email: richard@beddard.net or on Twitter: @RichardBeddard
AIM stocks tend to be volatile high-risk/high-reward investments and are intended for people with an appropriate degree of equity trading knowledge and experience.
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