What is John Mayo’s game? That is the question which has left FT Alphaville scratching its collective head over the weekend.
The proposals from Efficient Capital Structures have been largely rubbished by the analysts. Given his past, his involvement in the group, fronted by corporate financier Glenn Cooper, is arguably counter-productive to a meaningful debate about Vodafone’s structure and future. And the group has a tiny shareholding, just 210,000 odd shares, which they have parcelled up in 100 pieces, enabling them to employ an obscure piece of company law to press for change.
Represented publicly by its Vote4Value website (where it might do well to correct the spelling of “explaination” in order to preserve a razor-thin facade of professionalism), the group seems at first glance to have little economic skin in its own game.
Now reports emerge that the group is sitting on a pile of call options, for which it sought FSA approval before making its proposals for Vodafone public. John Waples wrote in the Sunday Times that those would give the cage-rattlers a £5m payday should the Vodafone share price reach 220p.
So for a total outlay of around £1m, you generate acres of coverage and get a £85bn company on the hop. Unfortunately, for the rebels, on Monday Vodafone’s share price, which in any case had risen only around 5p since the Vote4Value lot went public, fell back more than 1 per cent to 158.1p.
The kind of move that the group needs for their options to pay out, assuming Waples is right, is extraordinary – and, given the low historical volatility of Vodafone stock, highly unlikely. So what other upside is there for Mr Mayo?
Instead of skeletons, Mr Mayo had a ton of bad publicity in his closet. Since the implosion of Marconi, he has been pursuing his life and business interests away from the public markets.
Any return to public life was bound to prompt a barrage of negative press. But stories on Mr Mayo’s past – the demise of Marconi, the devastating comments made about Mayo following Lord Weinstock’s death – only get wheeled out once.
Now they’ve been written. John Mayo, the man who destroyed Marconi, is rehabilitating himself, or trying to, as John Mayo, the man who had a pop at Vodafone.
Taking the not-particularly original, not-particularly insightful proposals to Vodafone is high enough profile to emerge back on the scene of UK plc with a bang and draw out the flak. But, given the structure the activists have used, is low enough risk not to matter too much if they walk away with nothing but a “no thanks” from Vodafone and its shareholders.
As far as clever PR goes, this could mark the beginning of an all-time great come-back. And who knows – there’s an outside chance the marauders might just make themselves a little cash in the process.
But what might the newly-rehabilitated John Mayo really be setting his sights on? He is, after all, likely to have his share of £1m odd in costs to recoup from this escapade.