Investors with contracts for difference or spread bets have targeted central London specialist Compco Holdings.
This week, Cantor Fitzgerald raised its stake in Compco, which earlier this month announced it was in bid talks, to 7.25%.
A spate of recent deals have made the broker one of Compco’s largest shareholders. Around three-quarters of the stake is held as hedges against spread betting on Compco’s share price, with the rest held as CFDs, a derivative product.
CFDs allow an investor to gain exposure to share price movement without owning shares or paying stamp duty.
Some entrepreneurs have used them to build up stakes in companies.
Robert Bonnier has built up a 12.7% stake in Regus by buying the voting rights of the shares that Cantor Fitzgerald had acquired in the company to hedge the spread bets.
Compco joint chief executive Robert Nadler said: “We’re not used to having this type of investor, but as spread betters tend to take short-term positions, it’s not something that would affect us too much.”
References: EGi News 30/05/03
