Tuesday 6 January 2015

Elliott raises Prezzo stake to almost 14.5pc - yikes!

I think the Prezzo shareholder vote scheduled for this Friday at Olswang's offices is about to get rather fruity. Secretive hedge fund group Elliott Advisers has just now declared it owns a stake of almost 14.5pc in Prezzo and word is the fund was trying to gobble up more stock in the market today. Here is a link to Elliot's declaration:


For readers that don't recall, Prezzo accepted a £300m takeover offer from private equity firm TPG Capital late last year. However, the TPG offer of 126.5p a share was at a discount to the then prevailing share price, which angered some investors and stockbrokers. Still, the Kaye family, who own 58pc of Prezzo, decided to back TPG's cash offer (the Kaye's are likely to make around £170 million from the sale to the buy-out firm). It looked like it was a slam dunk of a deal for TPG.

Not anymore, though. Elliott only needs a few more Prezzo shares and suddenly the scheme of arrangement threshold of 75pc in favour of the TPG offer doesn't look so easy to achieve if the investment firm votes against the transaction (this is because not all shareholders bother to vote at the meeting).    

Most observers reckon Elliott is pushing for a "bump" (hedge fund parlance for a higher bid) in return for accepting a new offer from TPG but really it is often quite difficult to second guess what the aggressive hedge fund group really wants.

All I have been told by people familiar with the matter is that the Elliott portfolio manager responsible for the 14.5pc shareholding in Prezzo is a chap called Franck Tuil, who runs the "activist" book at the European office of the American hedge fund. Read into that what you will.


  1. Interesting situation.
    Can TPG delist Prezzo when Elliott does not tender its >10% shares? Or can Elliott strike a deal at a higher price and minority shareholders get less?

  2. Prezzo suspended since this morning. Let's what Elliott is up to....