Black Sheep Brewery: Founder shareholder seeks probe into controversial £5m sale

A founder shareholder in Black Sheep Brewery is calling for further investigation into the company’s recent sale through a controversial pre-pack administration deal.

Steve Taylor was among the original shareholders in Black Sheep Brewery after the company was set up in 1992.

Mr Taylor told The Yorkshire Post he held 1,750 shares in the company which have now been wiped out as a result of the sale process, which saw Black Sheep’s structure change from a public listed company to a new private limited company.

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He is one of around 1,000 shareholders affected by the sale, which has also left hundreds of creditors and taxpayers millions out of pocket.

Black Sheep Brewery in Masham, North Yorkshire. Picture: James HardistyBlack Sheep Brewery in Masham, North Yorkshire. Picture: James Hardisty
Black Sheep Brewery in Masham, North Yorkshire. Picture: James Hardisty

Mr Taylor, a recently retired chartered compliance professional, told The Yorkshire Post: “It feels as if we have had the company stolen from under our feet.”

The Masham-based company was sold in May to London investment firm Breal Capital for £5m in a pre-pack administration deal – a process that effectively allows businesses to continue trading seamlessly as before with the same name but can cause controversy because of its impact on creditors owed money.

It has since been revealed that creditors are collectively owed more than £6m – much of which is unlikely to be ever repaid.

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Since Breal took over, three of the four Yorkshire pubs run by Black Sheep have been closed down.

Mr Taylor has written to administrators Teneo that the last Black Sheep accounts published in September 2022 stated the company was a going concern and that “the directors have prepared forecasts for the 12 months from the date of signing which show that the group is able to meet its obligations as they fall due”.

He has asked Teneo to investigate why those statements contradict the decision to put the firm into administration and sell it just a few months later.

Mr Taylor also said greater efforts should have been to raise funds from shareholders before the company was placed into administration.

"Shareholders wanted Black Sheep to prosper,” he said.

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A report produced by Teneo about the administration stated that in November an equity raise process was attempted which “focused on high net worth individuals rather than trade or Private Equity investors and was designed to attract investment via a rights issue for existing shareholders, alongside the opportunity for new shareholders to subscribe to new shares”.

That process was unsuccessful and Mr Taylor said that he had not been made aware of any attempts to raise equity from himself or other shareholders.

He said while Teneo deemed the sale of the business to be the “optimal outcome for all stakeholders”, he did not believe the position of shareholders had been properly considered.

Mr Taylor is due to talk with Teneo next week and will be seeking the organisation of a meeting open to all shareholders to discuss the way forward.

Teneo did not wish to comment.

Black Sheep Brewery did not respond to request for comment.