Qatar sells shares for £260 million

Qatar Holding has sold a 5 per cent stake in the London Stock Exchange making a profit of approx 20 per cent!
BySusanna WolfeMonday , 14 July 2014
Qatar sells shares for £260 million

Qatar Holding has sold 13.62 million London Stock Exchange (LSE) shares for 1,915 pence each, cutting its holding by a third. It also has investments in Barclays Bank, J Sainsbury and Shell but said it did not expect to sell more LSE shares in the immediate future and still retains a 10.3 per cent stake.

It is thought that Qatar could use the proceeds to buy stock in an upcoming share sale by the LSE to help fund the exchange group's $2.7 billion purchase of US indexes and investment management business Russell Group. This $1.6 billion share sale is likely to be conducted at a larger discount to the LSE's share price because of its size, meaning Qatar could potentially buy back shares more cheaply. Qatar bought a 20.86 per cent stake in the LSE in 2007, paying 1,585 pence a share. The stock fell heavily during the global financial crisis but has steadily risen to gain new highs this year.

Citi and BoA Merrill Lynch ran Qatar's share sale and had originally expected to sell the stock at between 1,845 and 1,925 pence. Espirito Santo analyst Phil Dobbin said the smaller discount achieved was a sign of good demand for LSE shares. He also said that Qatar's stake, and the large shareholdings of other institutions, had in the past put off some investors buying LSE shares due to their lack of liquidity, so the sale and the planned rights issue could attract more buyers to the stock.

Essa Kazim, chairman of Borse Dubai, the top shareholder in LSE Group with a 20.5 per cent stake, told Reuters last month that the organisation was happy with the LSE's performance and had no plans to raise or lower its stake.

Interesting times!