Hibu Shaft Shareholders

I previously wrote about Yell in an article in 2010 lamenting the corperate fools in charge who were running the famous directory business into the ground, turning a £5bn market valuation to £4m in a little under 5 years. (Although, possibly to call them fools is not appropriate because as usual, these corperate types take their stock options, high salaries and seemingly carry no responsibility when their mismanagement railroads` the business.)

Since then, Yell have renamed the company to HibuHibu in 2012, although they still run a digital directory as Yell.com. Though, I may add, a very underperforming website in search listings considering its size, because in well optimised local web markets,Yell are barely visible.

Seemingly, it all went wrong for Hibu during the mid 2000`s with expensive acquisitions of paper based directories just as the web was steering towards digital online advertising. (Iceberg? What iceberg? Full steam ahead John Condron and Bob Scott.) Burdened with a £2bn debt mountain, the company were forced to re-structure, which eventually led to a debt for stock swap and the business becoming privately owned.

The biggest losers in all this are the shareholders who saw their shares become worthless, some of which included pension funds. They are rightfully angry about the way they have been treated. One of the main concerns of the shareholders is that Hibu was not transparentwith information to the markets about its finances and potentially in breach of their fiduciary duties under the Companies Act 2006. Another bone of contention from shareholders is about Non Executive Chairman, Bob Wigley who coincidently became a shareholder and debt owner in 2011.

The Hibu chairman was ready to put his hand in his pocket and buy shares worth £100K. But, as it later transpired, his purchase of $1M of debt for £200k meant that, in the event that the old Hibu failed, he would still hold a sizeable chunk of the New Hibu that would replace it. His declared intention to “safeguard existing shareholders’ interests to the fullest extent possible” must surely have been compromised by his purchase of debt. -Hibu Shareholders Group

Obviously, shareholders would be keen to sell their shares in the event they think a company is underperforming or the governance not legally representing their interests. But how could they know this with the accusation about a lack of transparancy from the board? Once the shareholders knew companies like Royal Bank of Scotland and Goldman Sachs were involved, surely, the writing was on the wall. However, at the end of the day, it has to be asked why the shareholders themselves did not see the Google juggernaut over the horizon.

Since 2009, amidst these logical accusations against companies like Hibu and the city financial institutions, we have not seen one court case or prosecution. These people should bow their heads is shame.

Hibu issued early bonuses to directors and staff in June 2013.

From July 2014, the private owners of Hibu, have ordered another change of trading name when speaking to clients, back to Yell. A spokesman said it is now using Yell because it has “a strong history, awareness and loyalty among our customers” in Britain. A City figure said the company had hoped to make the U-turn quietly without media attention.

One fact remains the same since my last post on Hibu. Local SMB`s can skip the middle man, the 10%`s like Hibu and deal direct with Google or Yahoo advertising. There is provision for free web based management for local geographical web listings, integrated with maps and directions on mobile devices, reviews facility which earns you prominent search positions, website analytics and Pay Per Click advertising. All of which can be managed by the local business owner or a local marketing company who will charge a simple set up fee, as I do.

Hibu is just a tier in the web advertising market that can be removed with no real loss for the SMB. 

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