Activist investor Saba Capital has taken short positions against some key UK companies, including beloved Harry Potter publisher Bloomsbury, despite previously claiming to be the “white knight of the UK market”.
The American hedge fund has taken out a 0.95 per cent short position against the £537m publisher, or a roughly £5.1m bet against it.
The news comes despite the hedge fund’s CEO, Boaz Weinstein, previously claiming that the hedge fund was attempting to put money into the UK as part of its failed campaign to take over investment trusts.
“We are the white knight of the UK market. Everyone is a seller. We’re a buyer,” said Weinstein last month.
Weinstein made the comments before Saba’s attempts to remove the boards of seven UK investment trusts were thwarted by shareholders.
Less than one per cent of independent shareholders voted for the hedge fund’s proposals.
Financial Conduct Authority data has revealed that in the weeks since the first shareholder defeat from Herald Investment Trust, Saba took out six short positions against different UK companies.
Bank of England banknote printer De La Rue has also been targeted by Saba, with a 0.69 per cent position against it worth roughly £1.6m.
De La Rue is currently in the middle of a potential bidding war for its ownership after it received a £246m takeover offer from companies founded by private entrepreneur Edi Truell.
However, it had previously been struggling with “substantial trading difficulties,” selling off the authentication arm of its business to fund pension payments.
Other firms targeted by Weinstein’s hedge fund include fintech platform Aptitude Software, electrical component manufacturer Discoverie, lighting producer Luceco and consultant Next 15.
Saba is the only company shorting these stocks by more than the maximum position needed to report it to the FCA (0.5 per cent), other than Discoverie, which two other firms are short.
CompanySaba short position (per cent)APTITUDE SOFTWARE GROUP PLC0.83BLOOMSBURY PUBLISHING PLC0.95DE LA RUE PLC0.69DISCOVERIE GROUP PLC0.77LUCECO PLC0.53NEXT FIFTEEN COMMUNICATIONS GROUP PLC0.87