Neil Woodford has sold his large stake in an Irish life sciences business for a 55% discount to its “conservative intrinsic value”, according to a private equity firm that swooped for the shares.
Pentwater Capital Management now has a 26% interest in Malin Corporation having had a small stake for nearly two years, a regulatory filing said.
The same regulatory filing noted Woodford Investment Management no longer has a notifiable stake.
Willis Owen head of personal investing Adrian Lowcock said it has been clear disposals would be made in unfavourable conditions since the Equity Income fund suspended in June.
“Naturally any discount of disposals is going to impact the value of investors’ assets in the Woodford Equity Income fund, just adding to the bad news for investors,” Lowcock said.
‘Deep discount to its conservative intrinsic value’
Irish media had reported Woodford had sold his 23% stake on 24 September.
Malin noted in two regulatory filings from 26 September that UBS and Citigroup had acquired notifiable stakes of 9.5% and 6.6% respectively. Pentwater holds its stake via various counterparties, the latest RNS said.
Woodford appears to have sold the stock for €3.60 (£3.24) – a 55% discount to the value Pentwater sees in the business. Woodford Equity Income and Woodford Patient Capital both held the Euronext Dublin-listed stock.
“We have acquired a significant interest in Malin at a deep discount to its conservative intrinsic value of €7.90 per share,” Pentwater management said in the filing. “We are supportive of the current business strategy and of the Malin management team and are very excited about the potential of Malin’s assets to create significant additional value for shareholders.”
Malin chairman Liam Daniel said he welcomed Pentwater as significant stakeholders. “Our assets are progressing, with several significant near-term milestones which I believe can be the catalysts to significant value creation for all our shareholders.”
Investors pick away at Woodford holdings
Pentwater is not the first investor to swoop for discounted Woodford holdings.
RC Brown Investment Management has been part of a consortium of institutional investors that have tapped the beleaguered manager for bargains, including Morses Club and Ten Entertainment.
Investec value manager Alastair Mundy has also admitted to buying into the Woodford overhang.
Woodford has previously tried to reassure investors that the suspension of the Equity Income fund would not force him to sell holdings at distressed prices.
But Bloomberg calculations from September show he lost money on eight out of 10 positions sold in their entirety since the fund suspension. The total losses from the sales were £43.5m.
