UBS was acting for private equity firm CVC which wanted to sell half of its stake in Abertis, amounting to 7.5 per cent of the Spanish shares. The bank ran a block trade – it bought shares for a set price, planning to sell them on.
But the price of the shares dipped. The bank had paid €16.40 per share, but in early trading the stock fell below €16.20, meaning it could not get the price it had hoped for in the morning.
Under Spanish rules, it issued a “hecho relevante” – “significant event” statement, saying it had to step in to fulfil its underwriting role. However, it may have been saved by a recovery in the stock – by close of play yesterday the shares were back up at €16.53, giving UBS a chance to offload more shares at a profit.
Even at that price, the stock was down 3.73 per cent on the day, taking the bankers by surprise mid-deal.
UBS declined to comment – it hopes to sell off the stake before it has to declare a holding. If it is left with a substantial stake, it would have had to declare the holding tomorrow – not the result UBS wants as an agent, rather than an investor.