Move raises the prospect that Sherborne could start agitating for change at private equity group 3i, which is emerging from a turbulent year of restructuring
Private equity group 3i has put shareholders on alert that turnaround specialists Sherborne Investors have been buying shares in the company.
3i said on Tuesday that Sherborne – which is run by Edward Bramson, who led the boardroom coup at F&C Investments two years ago – had been acquiring stock since 2 January and had then sold them on to its broker, Jefferies International.
Jefferies has since acquired further shares in 3i to bring its stake to 1.6%, worth around £40m.
The move raises the prospect that Sherborne could start agitating for change at 3i, which is emerging from a turbulent year of restructuring.
3i drew attention to the fact that Sherborne has recently raised more than £200m through its new Aim-listed Guernsey B fund, or “SigB”, reportedly to build a stake of up to 30% in a single target, probably in the UK. SigB is backed by one of George Soros’ funds, Soros Fund Management.
However, £200m would buy only 8% of 3i’s shares at the current price of 264p, up 2.3% today.
3i was not obliged to put out the statement but it is understood it wanted to put shareholders on notice of Sherborne’s move.
Neither Sherborne nor Jefferies is thought to have informed 3i that it had acquired shares.
US-based Sherborne was founded by Bramson in 1986. According to its website, it invests in “companies which we believe have the potential to increase their profits substantially but which have underperformed for an extended period of time”.
In 2011 Bramson used Sherborne’s stake in F&C to oust the chairman and chief executive and install himself as executive chairman.
Sherborne’s other investments have included chemicals company Elementis, promotional products group 4imprint, and telecoms group Spirent. Bramson has been chairman at each of them.
A spokesman for Sherborne declined to comment.
3i, whose investments include lingerie business Agent Provocateur, fashion retailer Hobbs and the Giraffe restaurant chain, faced pressure from investors last year over its performance.
Under chief executive Simon Borrows, the company is in the process of cutting 160 jobs, more than a third of its workforce, and has closed six of its 19 offices, including those in Birmingham, Hong Kong and Shanghai.
The share price has been recovering strongly since then and the company is planning to dispose of its stakes in Canadian manufacturer Mold Masters and Danish-German ferry operator ScandLines.
3i traces its roots to 1945, when it was set up to provide capital to small and medium-seized businesses in the aftermath of the second world war.
It floated on the London Stock Exchange in 1994 and today focuses on mid-sized companies as well as infrastructure and debt management .