Barclays Plc (BARC) is stuck holding a 697 million-euro ($900 million) stake in Ziggo NV (ZIGGO), a Dutch cable- television operator, after failing to find enough buyers for a 20 percent share sale it managed for owners Warburg Pincus LLC and Cinven Ltd. this week.
The bank held about 28.4 million Ziggo shares as of March 19, representing a 14 percent stake, a filing posted on the Dutch markets regulator AFM’s website today said.
Barclays, now among Ziggo’s largest shareholders, joins banks including HSBC Holdings Plc and Morgan Stanley that were left holding company stakes since early 2012, after failing to find investors at the price for which shares were offered.
A spokesman for Barclays declined to comment on the outcome of the share sale. The bank said in the filing that it held Ziggo’s shares in Barclays Bank Plc and Barclays Capital Securities Ltd. The 14 percent stake is valued at 697 million euros based on the March 19 closing price of 24.5 euros a share.
This is the first share sale Barclays has managed for Ziggo, which went public last March. Cinven, Warburg Pincus and their co-investors will own about 17.1 percent of the company after the sale, they said in a statement on March 19.
Ziggo shares fell 3.7 percent to 24.22 euros at the close in Amsterdam. The stock has gained 11 percent in the last 12 months, giving the company a market value of 4.8 billion euros.
Barclays’s disclosure that it was left holding Ziggo shares “increases the risk of an overhang, which could put pressure on the share price in the near term,” Daniel Kerven, an analyst at Bank of America Merrill Lynch, said in a note to clients today. Kerven has an “underperform” rating on the stock, citing factors including weak operating momentum and relative valuations.
Investment banks bid to manage share sales like Ziggo’s in an auction process, typically competing to sell shares at the lowest discount to market. Banks often manage sales in such a way that the underwriter has to buy them if there is no demand at the price offered.
Morgan Stanley (MS:US) was left with almost half the $982 million in TDC A/S (TDC) shares it tried to sell on behalf of the Danish phone company’s private equity owners in February 2012, people with knowledge of the sale said then. In November, HSBC disclosed a stake worth 400 million euros of Amadeus IT Holding SA (AMS) shares after failing to find buyers for a stake in the travel reservations company.
This month, shareholders in Koc Holding AS (KCHOL), Turkey’s biggest group of companies, canceled a sale managed by Deutsche Bank AG. Investment banks, like Deutsche Bank in this case, sometimes negotiate contracts that do not require them to buy the shares they offer if there is no investor demand.
Issuers in Europe have raised $21 billion from additional share sales this year, close to 30 percent more than they sold in the same period last year, according to data compiled by Bloomberg.
Goldman Sachs Group Inc. (GS:US) helped a shareholder in Cie. Financiere Richemont SA, owner of the Cartier brand, sell about 7 million shares for 539 million Swiss francs ($569 million) through an accelerated sale this week.
40 Million Shares
Warburg Pincus, Cinven and some co-investors cut their stake in Utrecht, Netherlands-based Ziggo on March 19 by selling 40 million shares, about 20 percent of its share capital. “We take note of the filing,” Martijn Jonker, a Ziggo spokesman, said by phone today, referring to the document from Barclays.
Warburg and Cinven sold the shares at 25.05 euros apiece, terms of the offer showed, valuing the sale at 1 billion euros. The sale price represented a 3.1 percent discount to March 18’s closing price of 25.85 euros.
This month, Ziggo named Deutsche Telekom AG (DTE) Chief Executive Officer Rene Obermann to be its new CEO as of January next year.
Barclays’ 14 percent stake reported today includes the bank’s holdings in the stock before the sale, held for other parts of the lender.
To contact the reporters on this story: Martijn van der Starre in Amsterdam at firstname.lastname@example.org; Ruth David in London at email@example.com
To contact the editors responsible for this story: Jacqueline Simmons at firstname.lastname@example.org; Kenneth Wong at email@example.com