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UPDATE 2-Laxey seeks Shaftesbury exit, shares fall

Published 06/11/2009, 03:59 AM
Updated 06/11/2009, 04:08 AM
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* Laxey offers 19 percent stake in placing

* Follows consent to rights issue last week

* Shaftesbury shares fall 6.1 percent to 290 pence

(Adds analyst comments, shares)

By Sinead Cruise and Paul Hoskins

LONDON, June 11 (Reuters) - Activist investor Laxey Partners is offloading its 19 percent stake in London retail property company Shaftesbury, just days after backing the company's 150 million pound ($246.1 million) rights issue.

Laxey said on Thursday it had appointed JP Morgan Cazenove as sole bookrunner for the placing of just over 25.7 million shares and around 17.2 million nil-paid rights in Shaftesbury, which owns large chunks of real estate in London's Soho and West End shopping districts.

Laxey's stake in the company was valued at around 130 million pounds at the closing price of 308.75 pence on Wednesday. The sale is due to complete at the end of the day.

Shaftesbury shares dropped 6.1 percent to 290 pence by 0720 GMT but analysts said the sale had longer-term upside for the company.

"It was always a mystery as to what anyone could find to be 'activist' about in this high quality real estate investment trust," Mike Prew, property analyst at Nomura said.

"It looks like the rights issue has not only given Shaftesbury shopping money but diluted Laxey off its share register, which should be higher quality as a result," he added.

Michael Burt, an analyst at Noble Group, said he expected Laxey to use the placing proceeds to chase M&A opportunities on London's junior stock market AIM, following its takeover approach to Italian real estate investor Spazio Investments NV.

"We are unsurprised by this morning's announcement ... this represents a rational means of raising capital despite the material book loss they will take on their stake," Burt said in a note to clients.

"We would expect there to be strong demand for both the shares and the nil paid rights (in Shaftesbury), and believe today's offering represents an excellent opportunity for investors to start building a stake in what is certain to be one of the winners coming into the next property up-cycle." ($1=.6096 Pound) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters) (Editing by Jon Loades-Carter)

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