- What Samuel Tak Lee has been holding talks with investors around the sale of his 26.15% stake in Shaftesbury
- Why His motivations are unknown but the Shaftesbury share price has plummeted as a result of COVID-19
- What next Citi has been involved in the discussions
Major Shaftesbury shareholder Samuel Tak Lee is exploring a sale of his 26.15% stake in the company, React News can reveal.
Citi has been involved in the talks over options for the shares which are valued at around £413.2m. Select investors are understood to have been engaged over the past few days.
An industry source said: “I expect there to be high demand for this from institutions and sovereign wealth funds, the question is the price. Blocks such as this are as rare as hens teeth.”
The Hong Kong-based investor has been at loggerheads with the company’s management and is currently taking legal action against Shaftesbury for issuing shares in 2017. The claims, which are denied, state that the process was undertaken in order to dilute his shareholding.
Tak Lee, along with other Shaftesbury shareholders, has seen the value of his stake plummet as a result of the onset of the COVID-19 pandemic. Since the start of the year its shares have fallen by more than 45%, currently trading at around 510p. Swathes of shops, restaurants and bars in its portfolio have had to shut because of the ongoing lockdown.
Were Tak Lee to sell his stake it would be the end of a long-standing corporate saga at Shaftesbury. His stake in the company has fluctuated over the past decade but he has consistently been one of the largest shareholders, typically holding around 25%. In 2015 he made what was at the time a lowball offer of 888p for a 9.3% stake in the company.
Shaftesbury has long been mooted as a potential takeover target by sovereign wealth investors due to its high-quality central London portfolio, as has a merger with its geographical neighbour Capco. However, its corporate structure is perceived as tricky, in part due to Tak Lee’s ownership and the need to get him on board for any deal. Whether a sale would unlock a broader corporate deal remains to be seen.
Norwegian sovereign wealth fund Norges Bank currently owns just over 25% of the company, including having bought an 8.2% stake from Invesco in 2018 for £245m, or 970p per share. It would not be able to buy more than 30% of the shares in the company without making an offer for it in its entirety.
The prospective move by Tak Lee in the midst of the the ongoing crisis has echoes of a similar move made by activist investor Laxey Partners in 2009 during the global financial crisis. Laxey sold a 19% stake in the company, which had been valued at £130m, for just £90m in order to make a quick exit.