By ELLEN READ markets writer
Listed furniture maker Damba Holdings is the mystery buyer of an 11.4 per cent stake in online cosmetics marketer Beauty Direct.
Damba - soon to be renamed Cube Capital - bought the stake on Friday, paying on average 8.5c a share for 3.2 million shares.
The purchase positions
Damba as Beauty Direct's second largest shareholder, trailing only its chief executive and founder Bronwen Evans, who owns almost half the company according to its published records.
Damba managing director Simon Wallace said the purchase was an opportunity for Damba's investment team of himself and Ian Smith to work with Ms Evans to "help her further the gains already made with the company."
They will also screen approaches made to Beauty Direct's $2.1 million investment fund.
"We need to sit down with Bronwen this week and go through in detail what might happen with the company. In essence, I'm sure the business is progressing satisfactorily but we might look to ramp that up a bit quicker and get the company profitable a bit quicker," Mr Wallace said.
Both he and Mr Smith have been invited to join the Beauty Direct board, with Mr Wallace to be appointed chairman.
Yesterday he would not rule out increasing the Beauty Direct holding but said there were no plans to do so in the near future.
Damba has an option to subscribe for up to 2.8 million additional shares at 9c per share, subject to shareholder approval - which would increase its stake to 19.9 per cent.
Mr Wallace said he believed Beauty Direct shares were at the bottom end of the price cycle and that the whole IT sector was entering the bottom of the cycle.
That made it an appropriate time to make investments and, while he would not detail them, he said Damba was likely to do so in the future.
