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One of JJB Sports' biggest shareholders today revealed it has sold more than half its stake in the troubled retailer ahead of taking up its rights to buy new shares at a much lower price.
The sale surprised other investors because JJB made it clear last week that its £100 million rescue share issue had the backing of its two largest shareholders.
Activist investment fund Crystal Amber sold 22 million shares in the market at the end of last week at 32.6p, which is much higher than the 25p at which the new shares are being issued. It is left holding 13.7 million shares.
William Collins, chairman of Crystal Amber, said: “We have been actively involved with recent developments at JJB and welcome the proposed fundraising. Following the placing JJB will remain the largest holding of Crystal Amber Fund.”
But by selling existing shares in the market and taking up new ones Crystal Amber will cut its stake in JJB from 14.1% to 6.5% when the new share issue goes through.
Crystal Amber bought its original stake during April and June of this year at an average price of 22.43p a share.
That means it has made a profit of £2.23 million on the shares it sold last week.
JJB's largest shareholder at the moment is David Herro's Chicago-based Harris Associates with a 14.5% stake.
