Newspaper article The Evening Standard (London, England)

Market in Shock after Laxey Pulls out of Shaftesbury Shareholding

Newspaper article The Evening Standard (London, England)

Market in Shock after Laxey Pulls out of Shaftesbury Shareholding

Article excerpt

Byline: Hugo Duncan MARKET ROUND-UP

ACTIVIST investor Laxey Partners today dumped its holding in Shaftesbury only a month after the West End landlord tapped the City for nearly [pounds sterling]150 million.

Shares in Shaftesbury, which owns what it calls "villages" in Carnaby Street, Chinatown and Covent Garden, tumbled 6% or 183/4p to 290p to value it at [pounds sterling]655 million.

Hedge fund Laxey stunned the market and Shaftesbury with its decision to offload its 19% stake in the firm -- much of it held through the Londonlisted Terra Catalyst Fund -- having backed the two-for-three rights issue.

JP Morgan Cazenove is placing Laxey's 25.7 million shares along with 17.2 million nil-paid rights attached to the stake under the terms of the fundraising.

The shares were being snapped up at between 275p and 300p today while the nil-paid rights were trading for nearer 100p.

The holding was worth [pounds sterling]130 million last night but Laxey looks set to take a [pounds sterling]40 million hit by bailing out of Shaftesbury for just [pounds sterling]90 million. Terra shares fell 1/2p to 461/4p Laxey, a well-known corporate agitator based in Jermyn Street in London, bought into Shaftesbury in March last year when it took a 14.5% stake for [pounds sterling]114 million.

Shareholders including Laxey overwhelmingly backed plans by Shaftesbury to issue new shares to raise [pounds sterling]149.1 million to develop a new village in Ber-wick Street, Soho. However, although Laxey initially supported the rights issue, it was thought to be reluctant to commit further capital to the company, which has been one of the better performing property stocks over the last two years thanks to its West End focus.

Shaftesbury was the biggest faller in the FTSE 250 today, although the midcap index ticked 2.27 points higher to 7732.25. The FTSE 100 index was also struggling for direction, down 8.57 points to 4428.18.

Deutsche Bank had its eyes on the recruitment sector, downgrading Hays to sell from hold and raising its price on Michael Page to 131p from 120p. Hays fell 21/2p to 893/4p and Page was unchanged at 2583/4p. …

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