Odey bets against £1.9bn BCA takeover
Star hedge fund manager Crispin Odey upped his bet against BCA Marketplace this week, even as the company’s shares soared on a takeover approach.
Odey, who believes the deal will likely fall through, is preparing to cash in.
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His firm, Odey Asset Management increased its short position in the BCA after TDR Capital proposed a 243p per share offer on Thursday, he told the Sunday Telegraph.
The fund already held a 0.61 per cent short position in the company. Odey did not reveal the new stake.
“BCA is expensive at that level and it’s a business that is likely to return five per cent, maybe 11 per cent or 12 per cent at best, and that’s just not enough,” Odey told the paper.
BCA said on Thursday it was in advanced talks with TDR over the all-cash offer. It values the business at £1.9bn.
Shares shot up on the news, hitting 238p on Thursday, up 22.3 per cent sent since Wednesday’s close. They remained flat on Friday.
The FTSE 250 company owns the platform Webuyanycar.com.
Revenue grew 22 per cent in the six months ending 30 September, BCA’s most recent results show. Meanwhile profit before income tax grew nearly 31 per cent year-on-year.
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“There’s a lot of evidence that Webuyanycar.com could be bypassed as a platform as the automotive industry changes, and I can’t see any point in buying these sort of assets with the potential for a downturn and the prospect for a trade war and tariffs affecting the sector, ” Odey said.
It is due to present its most recent set of annual results on Wednesday.