The finance house which said it may bid for serviced office group Regus admitted today that it only holds a minimal beneficial stake.
New York-based Indigo Capital, which told the stock market on Tuesday that it would be interested in making a recommended bid for Regus, admitted this morning that it only held 700,000 shares (0.12%) beneficially and that the remainder came through “contracts for difference” held with broker Cantor Fitzgerald.
A contract for difference is a derivative which allows the holder to gain exposure to a company’s share price movement without buying any shares.
Cantor Fitzgerald has acquired a 13.18% stake to hedge the Indigo position. Indigo has no voting rights over the shares.
Under the derivative arrangement, Indigo stands to make money when the Regus share price hits a certain level. It has contracts with reference prices ranging from 13.05p to 23.5p.
Regus’s share price was up 2.5p (11%) to 25.5p today.
EGi News 09/01/03
