Gateley CEO Michael Ward

Listed law firm Gateley has entered into an agreement with its partners to extend the period that they are 'locked in' and prevented from releasing their shares. 

The agreement concerns only the firm's 75 locked-in shareholders, who are restricted in how they can sell their ordinary shares for a specific term in order to guarantee the firm's stability. 

The current lock-in, which was put in place when the firm floated on the AIM market in June 2015, expires on June 8, 2020, according to a London Stock Exchange announcement. 

The new agreement locks its IPO shareholders in for a further five years until 2025. The lock-in also applied to 'associates' – anyone to whom shares have been transferred.

The agreement stipulates that those shareholders who held ordinary shares on admission will be "restricted to selling a maximum of 10% per annum of the aggregate number of the ordinary shares that they held on admission for a period of five years from June 8, 2020".

The firm's share price remained relatively flat on the announcement this morning (October 17).

When the firm entered AIM it was valued at about £140 million, with 81 partners subject to the current lock-in agreement; however, this number now stands at 75, of whom 70 hold an aggregate of 56,187,614 ordinary shares, or 49.4% of the total issued share capital of Gateley

Firm CEO Michael Ward said the new agreement received "overwhelming support" from partners, and that it "continues to demonstrate [partners'] long-term commitment to the group".

When Gateley floated in 2015, just under 50% of its equity went to external investors, while 50.1% was kept in the hands of equity partners, all of whom were subject to the lock-in, during which time some or all of their shares could be taken away if they left.

The firm's share value peaked in June 2017 at 195p a share, but currently sits at 162p on a £185m market cap.