Woodford’s stake in IP Group is being sold at a 13% discount on market trading as its suspended Equity Income fund sharply pivots to FTSE 100 investments.
Fund manager Woodford Investment Management has offloaded its 13.5% shareholding in commercialisation firm IP Group for a consideration of about £76m ($94.2m), the Financial Times reported yesterday.
The sale prices each share at $0.66, a 13% reduction on IP Group’s close on the London Stock Exchange yesterday. Neither IP Group nor Woodford Investment Management commented on the FT’s account of the transaction.
Woodford Investment Management was IP Group’s second largest shareholder, with its founding partner Neil Woodford owning stakes in 12 IP Group-backed businesses representing more than one third of the latter’s portfolio value.
Earlier this month, IP Group reportedly blamed the distress engulfing Woodford’s Equity Income fund for eroding confidence in healthcare investments and impacting its half-year financial update.
The $4.7bn fund was frozen in June 2019 amid fears it was unable to fulfil redemption requests from its investors, and Woodford is now slashing unquoted holdings in its portfolio.
The disposals should help Equity Income clear the 10% regulatory threshold for its unquoted portfolio share while also reallocating resources to liquid assets, with 84% of the sale proceeds so far invested in FTSE 100-listed firms.
Equity Income has lost 12.8% of its value since being suspended on June 3, the FT said, citing an update from its appointed administrator Link Fund Solutions.
