- Bloomberg News
London Stock Exchange Group ’s two biggest shareholders have adopted rather different strategies over the company’s £938 million ($1.5 billion) rights issue to fund its acquisition of Russell Investments.
Shortly after the deal was first announced in June, Qatar Holding sold a third of its stake in the company, cutting its holding to 10.3%. People close to the fund said at the time that it might use some of the proceeds to buy its allocation of new shares under the rights issue.
By contrast, Borse Dubai this week sold a smaller proportion of its stake and said the funds would be used to subscribe for all the new shares to which it is entitled in the rights issue which closes in three weeks’ time. By reducing its stake from 20.5% to 17.4%, via an accelerated bookbuild handled by Nomura, Dubai raised just enough money to pay for the new shares so keeping its financial investment in LSE Group intact.
In the past, investors tended to do this by selling sufficient “nil-paid rights” to pay for their remaining new shares. But bankers say sales such as Borse Dubai’s, done at an earlier stage in the process, are now more common as they provide greater certainty for investors and the company.
As for Qatar Holding, it may be regretting it didn’t hold on a bit longer. The LSE share price has risen 5% since its disposal which would have added about £12 million to the proceeds.
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(via WSJ Blogs)
