Activist investor Elliott Capital Advisors has taken control of a 12.9% stake in Quintain Estates and Development as it looks to disrupt Lone Star’s £700m bid for the business.
The US hedge fund has taken control of 67,950,000 shares using a contract for difference, agreed at between 130.5p and 131.5p per share, straddling Lone Star’s bid of 131p. The stake would be valued at more than £90m.
Elliott believes that the offer substantially undervalues the company and confirms that it did not accept the offer.
Elliott’s intentions are currently unknown but it could be looking to provoke Lone Star into upping its offer in order to buy the remaining shares it needs in order to take its offer unconditional.
Lone Star had hoped to hit the 75% threshold that was necessary in order for it to do so but fell marginally short at 71.73%, according to a statement released by the company today following the second close of its offer.
The offer has been extended for a further week to 30 September.
If the remaining Quintain shareholders do not push the takeover over the line there is a danger that Lone Star will walk away from the bid completely rather than increase its offer.
The original threshold set in its offer was 90%, a figure it reserved the right to reduce.
Quintain’s management, which hold a small stake in the company, have agreed to sell their shares to Lone Star and have recommended shareholders accept the offer.
Shareholders now have until 30 September to accept the offer.
If fewer than 75% of shareholders have accepted the bid by this date Lone Star has the option to increase its offer, extend again or withdraw altogether.
Should Lone Star gain more than 75% of shareholder approvals, those that have not accepted, including prospectively Elliott, will have the option to sell to Lone Star or retain an inactive stake in a private company.
