UBS block trade of Abertis stock met with weak market demand

Tim Wallace
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WEAK demand for shares left investment bank UBS holding stock in Abertis Infraestructuras for a time yesterday, after an unexpected dip in the share’s price.

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.

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