Directors' dealings

When Steve Morgan plays the market, he likes to play big. Morgan, the ex-chairman of housebuilder Redrow and current non-executive of hotels and fitness group De Vere, bought 1.67 million shares in De Vere on 17 January. At 279p each, this audacious foray cost him a cool £4.6 million and, added to his existing 12 per cent stake, made Morgan the single biggest shareholder.

The reasons for his actions were very transparent. De Vere, which is highly profitable, has been under considerable pressure in recent times from its now second biggest shareholder Guinness Peat. It has been pressing the board to break the company up and release value for shareholders. So, with Morgan taking his plunge at almost the same time that Guinness Peat upped its stake (to ten per cent), everything is set for an investment battle royal. Jumping on board at this point could bring returns. At 277.5p, the shares are at a near-50 per cent discount to net asset value.

Concerted efforts

Elsewhere, small cap directors have been rather quiet since the pre-Christmas rush, but there have still been some interesting deals about, with several instances of bulk buying.

Among the most noticeable was the action of a group of five Merant directors on 13 January, who between them picked up 35,000 shares at 93p apiece, two days before the company bought back 215,000 shares for cancellation at the same price. All of this followed second-quarter results from the business software group, showing off a second successive quarterly profit that enabled the shares to bounce up from 74.5p to 105p.

As well as being profitable (Collins Stewart expects £2.9 million pre-tax this year), Merant had $76.5 million (nearly £50 million) in the bank at the last count and a market cap of £105.7 million.

There has also been a bit of bulk buying at Envesta, the remodelled telecoms outfit still chaired by Stephen Dean (formerly of builder Artisan). Though Dean himself has been selling shares through his Aim-listed vehicle Cater Barnard, other, newer directors have been buying.

The company's latest finance director Kevin McGovern picked up his first 100,000 shares at 3.64p while fellow executives Stephen Evans and Matthew Baker topped up their holdings, buying an extra 1.2 million between them at 3.75p. The purchases followed an update on trading, saying that the business was matching expectations.

Over at First Property Online, fully-listed property player CLS Holdings has been offloading shares to directors. Chairman Alasdair Locke and chief executive Ben Habib snapped up the 1.7 million shares made available by CLS, with Locke making an additional purchase of 750,000

at 3p.

Post-warning plunder at Mothercare

Bad publicity has dogged Mothercare for years now, causing the shares to fall to an all-time low of 86.5p. Heads have rolled at the under-performing High Street retailer, and the latest new broom is being wielded by a man called Ben Gordon, formerly the managing director of Disney Store's Europe & Asia Pacific division. The new chief executive picked the aftermath of a poor like-for-like sales update to buy his first shares in the company, at 89p apiece. Now he has the task of raising their value, not an easy one if the City's doom-mongers are to be believed.

Mothercare's problems are generally regarded as specific to the company and its concept. But food and drink producers have been suffering from much more general negative sentiment, due to fears of consolidation (and therefore pricing pressure) in the supermarket sector on the back of the Safeway bid battle. Some directors have taken the recent sector weakness as a chance to buy in. Robert Wiseman Dairies' finance director William Keane bought 62,000 shares at 98p on 14 January, while James Lambert, the chief executive of frozen confectionary maker Richmond Foods, picked up 20,000 at 407p.