National Express Group Plc (NEX) fell 11 percent, wiping about 130 million pounds ($195 million) off its market value after the rail and bus operator’s largest investor, Elliott Advisors, said it would sell half its stake.
Elliott, the U.K. branch of New York-based hedge fund Elliott Associates LP, will dispose of 50.6 million shares, or 9.9 percent of the total, via a secondary placing, it said yesterday after the close of trading. The shares were offered at 210 pence a share, or 8.7 percent below yesterday’s closing price, it said today.
“Clearly there are worries the biggest supporter of the shares is selling,” and risk that Elliott may cut its stake further, said Alexia Dogani, a London-based analyst at Liberum Capital who has a hold recommendation on the stock.
National Express shares dropped 25.50 pence to 204.5 pence, reducing the London-based company’s market value to 1.05 billion pounds. More than 11.3 million shares were traded, or more than eight times the daily average during the last three months.
“Elliott is a strong believer in National Express’s management team and its strategy for continued outperformance,” the investment company said in today’s statement.
National Express came to a truce with Elliott almost two years ago, agreeing to appoint three independent non-executive directors to its board after the investor demanded that management consider a takeover or breakup to boost earnings.
The shares will be sold to institutional investors and no further disposals will be made for at least 90 days, Elliot said. National Express stock had advanced almost 13 percent this year before today.
Elliott said the sale was driven by a “desire to diversify its portfolio and invest in new opportunities.” The rail and bus operator “remains one of Elliott’s most important investments,” it said.
Elliott will become National Express’s third-biggest stakeholder, after European Express Enterprises and Prudential Plc (PRU), according to data compiled by Bloomberg.
Bank of America Merrill Lynch managed the placement of shares.
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