Carillion's Slump Yields a Windfall for Marshall Wace, BlackRockBy
Short sellers betting on a slump in the shares of Carillion Plc are in line for bumper profits after concerns of writedowns and speculation about a possible forced share sale wiped out more than half of the British construction company’s market value.
Marshall Wace LLP, BlackRock Investment Management and Naya Capital Management are among at least 19 money managers betting against Carillion shares, the most for any British company, according to data based on disclosures with the U.K.’s market regulator. Their combined short interest, a bet aimed at profiting from the drop in a company’s shares, stands at $278 million. A Carillion spokesman declined to comment.
Carillion shares plunged by 70 percent over three days after the company on Monday ousted Chief Executive Officer Richard Howson, suspended its dividend and warned of lower profit. Keith Cochrane agreed to lead the company on a temporary basis and said “no option is off the table.” The company has called in KPMG to review its slate of projects after cash flow deteriorated on some contracts.
Marshall Wace, which raised its negative bet earlier this month, leads short sellers with a position worth almost $40 million. Spokesmen for Marshall Wace, Naya Capital and BlackRock declined to comment.