Led by activist investor George Armoyan, Halifax-based Clarke Inc. (TSX:CKI) has acquired the Belkin family's stake in Vancouver's ailing Art in Motion Income Fund (TSX:AIM.UN).
In a private placement, Clarke acquired more than 1.5 million Art in Motion units from Belkorp Capital Management Inc. for $1.7 million at $1.15 per unit.
The sale increases Clarke's stake in Art in Motion to 39% of total units outstanding and approximately 29.3% of the fund's voting rights.
Clarke announced last week it was acquiring 627,600 units from GVP Holdings Inc., a holding company for Art in Motion's founders Garry and Vicki Peters. If the deal with GVP closes, Clarke will hold more than 3.7 million units. That total represents 46.8% of the fund's units outstanding and 60% of the fund's voting shares, and would secure Clarke's ownership of the fund.
Art in Motion has had a difficult year. Its revenue fell to $31.5 million for the nine-month period ending September 30, 2007, compared with revenue of $40.4 million in the same period in 2006.
The fund has suffered through a difficult market for authorized art reproductions, which has been compounded by cheap fakes from Asia and a soaring Canadian dollar.
But Art in Motion's net income rose to $2.2 million compared with a net loss of $25.2 million in the nine-month period ending September 30, 2006. That dramatic income turnaround was due in large part to a $3.3 million sale of the fund's land and building on Brigantine Drive in Coquitlam and a write down of goodwill reported for fiscal 2006.
Art in Motion's share price range during the past week: between $1.02 and $1.15; 52-week high: $3.15; 52-week low: $0.98.