HSBC, which last month disclosed a 5.4 per cent stake in Burberry, told the British fashion company last night that the huge jump in its holdings came on behalf of multiple clients rather than one investor looking to acquire a large position.
People close to the matter could not explain why it took HSBC more than three weeks to reveal the information, a move which left Burberry mystified about the identity of the shareholder. A Burberry request to HSBC, which acted as custodian for the trades, was initially refused, report Arash Massoudi and Bryce Elder.
One person close to Burberry said the company was informed on Tuesday that the unusual surge in HSBC holdings was “business as usual trading” and described the nature of the investors as “institutional”. Another person said it was “multiple” investors. Burberry and HSBC declined to comment.
The FT reported on Monday that the situation had prompted Burberry to turn to retained advisors at Robey Warshaw and Morgan Stanley to work on its defenses in the event that the stake was taken on behalf of any potential bidder.
The bank disclosed that its holdings accounted for 5.4 per cent of all Burberry shares on February 11, in a filing made four days later.
Whereas UK transparency rules usually require reporting of any shareholding over 3 per cent, investment managers are given partial exemption that requires them to disclose at more than 5 per cent. On March 3, HSBC said in a filing that its stake had since been reduced to under that level.
In the 14 years since Burberry became a publicly listed company, HSBC’s aggregate holding had never previously breached the 5 per cent disclosure threshold. The aggregate of its reported positions jumped to a record high of 11.8m shares earlier this year, up from just 606,000 in the fourth quarter of 2015, according to Bloomberg data.
Shares in Burberry fell 6.2 per cent just after midday in London trading to £13.71. Bloomberg earlier reported on the trades.