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Leeds United Stake-Sale Plan Pushes Gulf Finance to 8-Month High

Gulf Finance House EC (GFH) climbed to the highest in almost eight months as the investment company signed an agreement with a group of British investors for a partial sale of its stake in soccer club Leeds United.

The shares gained 1.8 percent to 56 fils, the highest close since May 27 in Kuwait, bringing the market value to 177 million dinars ($626 million). They soared 10 percent, the most since 2005, yesterday as the number of shares traded surged to more than twice the three-month daily average.

The Manama, Bahrain-based company that obtained creditor approval in May 2012 to restructure $110 million of debt said the investors are in the final stages of completing the stake sale, according to a statement today. The transaction requires approval from the English Football Association, said the company with interests from real estate to health care.

“The company is embarking on optimizing its balance sheet to increase its profitability,” Yazan Abdeen, the lead MENA fund manager at Jeddah-based Sedco Capital, said in response to questions from Bloomberg. “Deals like Leeds United should increase shareholder value.”

GFH took over Leeds, a three-time British Premier League champion, through its Dubai-based unit GFH Capital in 2012. The unit sold 10 percent of its holdings in the soccer club to another Bahrain-based financial institution, International Investment Bank, in March for an undisclosed amount.

How the company will increase profitability on its property portfolio and improve fee generation is yet to be seen, Abdeen said. GFH posted a third-quarter loss of $3.15 million.

The company’s Dubai shares dropped 2.9 percent after climbing 15 percent yesterday on record volumes of 820 million shares. The stock jumped 5.3 percent in Manama today.

To contact the reporter on this story: Sarmad Khan in Dubai at skhan170@bloomberg.net

To contact the editor responsible for this story: Samuel Potter at spotter33@bloomberg.net

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