Qatar Slashes Stake In London Stock Exchange Group

Qatar Holding is set to slash its 15 per cent stake in the owner of the London Stock Exchange by a third, ahead of the British company’s $1.6 billion rights issue to help it buy U.S. indexes group Frank Russell, the Telegraph reported on Wednesday, citing sources.

The sovereign wealth fund on Wednesday instructed Bank of America Merrill Lynch and Citigroup to sell almost five per cent in the LSE Group via an overnight accelerated bookbuilding, the daily quoted banking sources as saying.

Qatar Holding as well as LSE could not immediately be reached by Reuters for a comment outside of regular business hours in the UK. The sale was part of “routine portfolio management,” the paper said, quoting a statement it said was issued by Qatar Holding after the market closed.

Qatar Investment Authority (QIA), the investment unit of the Qatar government and the parent company for Qatar Holding, first bought 20.86 per cent of the London Stock Exchange (LSE) in 2007.

Based on the LSE Group’s closing price of 1956 pence per share on Wednesday, the 4.83 per cent being sold was worth 255 million pounds ($433.9 million), the daily said.

The shares were expected to be sold to a large range of institutions rather than a single buyer, the paper said, adding that the sale was likely to have been completed by the time the UK market opens on Thursday morning.

The Telegraph said that Qatar Holding would use the sale proceeds to maintain its 10 percent stake in LSE, without having to contribute additional cash for the expected rights issue.

The London Stock Exchange in January unveiled its plans to purchase U.S.-based Frank Russell for $2.7 billion as the stock exchange owner looked to move deeper into the world’s largest financial services market.