Xero’s Drury cashes up $95m stake
Xero founder and chief executive Rod Drury is keeping his philanthropic plans under his hat after netting almost $95 million from the sale of 3 million of his shares in the cloud accounting firm.
Xero said in a statement to the New Zealand stock exchange that Drury was selling the shares at $31.50 each to ‘‘institutional and professional investors’’.
The sale will reduce Drury’s stake in Xero to just under 13 per cent.
Drury indicated some of the proceeds would be going to good causes.
‘‘The transaction will provide an important foundation for my future plans to pursue a range of philanthropic and social endeavours,’’ he said in the statement to the NZX.
Xero spokeswoman Kate McLaughlin said Drury would announce those plans ‘‘in due course’’.
Drury appears to be ruling out following Trade Me investor and philanthropist Gareth Morgan into the political sphere, at least for now.
‘‘There are no political plans; Xero remains Rod’s focus,’’ McLaughlin said.
Drury once advised early investors in Xero to put their shares ‘‘in the bottom drawer and forget about them’’.
This is third time he has raided his bottom drawer, having previously sold Xero shares in smaller parcels.
In 2015, he cashed in 1 million shares for $20m, reducing his stake in the cloud software firm he helped found from 15.9 per cent to just under 15.2 per cent.
Earlier, in 2012, he banked about $5m from the sale of 833,000 shares during a capital raising.
Xero shares were trading down 2 per cent at $32.31 in early-afternoon trading yesterday after the announcement, valuing Drury’s remaining stake in the Wellington-based firm at $571m.
Sales of shares by top managers and directors can sometime unnerve investors, who may wonder if they signal an informed expectation that a company’s share price won’t much rise in the short term – though Xero shares have risen since Drury’s first two sell-downs.
Drury forecast there could be an upside for shareholders because more Xero shares would be held by regular investors, which would increase the stock’s liquidity.
Xero remained his ‘‘absolute day-today focus as we have so much opportunity’’, he said in the NZX statement.
‘‘I’m proud of what we have achieved as a company, evidenced by our strong recent financial results. I remain fully committed to Xero and building our global business from New Zealand,’’ he said.
The share sale was the second piece of unexpected news for Xero investors to digest in eight days.
Last Thursday, Xero surprised the market by announcing it would delist its shares from the NZX and switch all its sharing trading to Australia’s ASX, where it has a dual listing.
McLaughlin confirmed Xero was aware of a report that some investors were seeking support for a ‘‘special meeting’’ of shareholders to get the delisting decision overturned.
But she said Xero’s board had made the decision ‘‘in the best interests of Xero and all shareholders’’ and its hand could not be forced on the matter.
‘‘The clear legal position is that only a change of domicile requires a shareholder vote. Xero is not changing domicile and is deliberately remaining a New Zealand domiciled and headquartered company,’’ she said.