Ibex ‘secret’ investors use bank to amass 6 billion shares

The return of large corporate movements to the Spanish market has sparked activity analogue or “screen” which are carried out by commercial banks when they accept shares on behalf of large investors who want to become strong in the worldseveral companies from Telefonica in Sabadell Passing Grifols, Ferrovial, Applus, ACS, Indra, Solaria or eDreams.

According to EXPANSIÓN, organizations such as Morgan Stanley, Goldman Sachs, JPMorgan, Société Générale, Barclays, Citi, Bank of America, HSBC and Jefferies In recent months they have seized shares of Spanish listed companies by approximately 6 billion eurosprimarily used as the basis for derivative contracts with its clients.

Saudi attack

The most high-profile case of this type of operation was the appearance Saudi Telecommunications Company (STC) last year since 9.9% of Telefonica capitaldone through Morgan Stanley. The Arab operator took 4.9% directly from the Spanish group, and another 5% It is parked in a bank awaiting permission from the Spanish government to purchase it.

This organization states National Securities Market Commission (CNMV) A 12.18% Telefónica, adding shares reserved for STC and other derivatives to cover the Saudi firm’s resale of 4.9% and other shares the bank would have to sell. trade and in their means.

Caixa criteria accustomed Goldman Sachs as an intermediary for increasing 5% of its presence in Telefonicabut as an intermediary, without parking shares. Sepiwho took 9.9% duplication company STC also purchased them directly.

In case of recent occurrence CriteriaCaixa in ACS with a capital share of more than 9%Industrial holding company La Caixa bought its own shares, which the construction company transferred through derivatives with Societe Generale. This French bank after the operation reduced its participation in the group to 2%, according to CNMV reports.

Invasion Notary In Indra this was accomplished through a derivative system with J.P. Morganwhich announces 10.5% in this company. In the same company Sapa advanced by 7% Deutsche Bank and ING.

Activities of hedge funds

hedge funds They regularly use banks to purchase shares of listed companies because instead of buying shares directly, they usually subscribe to options or contracts for difference which gives them the ability to see the value trajectory without making the entire investment. These derivatives provide right to purchase shares at the end of the period or at get the price difference cash. The counterparty for these transactions is investment organizationswho acquire titles to occupy this position.

This leads to investment banks acting as shareholders in several firms where there has been offer for public acquisition (takeover offer) – a situation where arbitrage funds seek economic risk, expecting prices to improve, or in companies with activist funds who strive for rapid revaluation.

The most extreme example is the case Appluswhere does a long takeover war do Morgan Stanley, Goldman and Jeffries add up to 30%. Most correspond to shares in funds called “goose hunters”.

IN Sabadellafter a hostile takeover formulated BBVAalready appeared Goldman Sachs with 1% of capital, which the market interprets as a result accumulation of shares by the bank to cover derivatives by arbitrage funds. They must disclose their individual position only if they exceed 1% with these options or contracts. According to the rules, shares in acquiring companies exceeding 1% must be declared, unlike 3% regular.

Another company whose counterparties are several banks. Electronic dreamswhich has just begun a partial self-absorption of its own shares, although the appearance in its capital of such banks as Barclays or Morgan Stanley This explains more why Polyus Capital Through derivatives, it owns 27% of the travel booking platform.

It usually happens there activist funds obtaining influential positions in companies through this operation. This is the case 10% from TIC in Ferrovial, mainly through derivatives. As a result, Bank of America and HSBC They appear as shareholders of the infrastructure company. IN Grifolsthe emergence of opportunistic funds after the attack on Gotham explains why banks with significant assets.

Confusion over double registration in CNMV

An unexpected attack that LVMH opposes its rival Gucci in 1999 has implications for the method of registration of shares of European listed companies. During this maneuver the group Bernard Arnault took some derivatives on Gucci shares with cash execution. But at the last minute, he changed the performance formula with his colleagues, winning physical titles and gaining significant participation. After this battle, in which LVMH ultimately failed to acquire Gucci, investors must, in addition to the statement purchase of shares listed above certain levels, also declare derivativesbe it physical or monetary execution.

This regulation sometimes leads to double registration of the same shares: on the one hand, it investor which accepts derivatives, and on the other hand bank which acts as a counterparty and buys shares to cover the risk of the position. Sometimes the opposite happens: an investor owns shares, but at the same time enters into hedging derivatives with banks.

For example, in CNMV STC announces 9.9% stake in TelefónicaBye Morgan Stanley says it has 12% through various financial instruments (most of them related to the agreement to finance and secure the same position of the Arab group).

Similar situations occur in Indrawhere is the group Escribano reports 8% and JPMorgan 10.5%.; V Ferrovial for TCI derivatives; V Applus with the participation of banks and hunting funds; or in Electronic dreams for options Polyus Capital.

Dual registration does not exist when bank adds positions below 1% in public companies or 3% in listed companies in a normal situation, which is not required to be notified to end investors.

In any case, although the end investor must state his position, Transaction with banks allows you to postpone the announcement until the last minute, when the position has already been built, as he did STC at Telefonica.