Last week’s surprise rally in BCA Marketplace (BCA) may have given short-sellers a bloody nose but one firm is publicly refusing to admit defeat and has increased its bet against the shares.
Odey Asset Management, run by veteran manager Crispin Odey, held a short position of 0.6% in BCA’s shares when the company announced last Thursday that it had received an offer for the entire business at 243p per share.
Shares in the car-auction firm, which also operates the webuyanycar.com website, jumped 22% to 238p. However Odey believes that the approach from private equity firm TDR Capital will collapse, sending the shares back down and netting him a tidy profit.
He hasn’t revealed by how much he has increased his short position but Odey has said he ‘can’t see any point in buying these sort of assets with the potential for a downturn and the prospects for a trade war and tariffs affecting the sector’.
The stock has today slipped 2% to 233.4p.
READ MORE ABOUT BCA MARKETPLACE HERE
According to data from IHS Markit, 6.2% of BCA’s shares are in the hands of short-sellers, who stand to gain if the price falls sharply. As well as Odey, the FCA lists Adelphi Capital, CZ Capital and Pelham Capital as having short positions.
BCA Marketplace has said it is in ‘advanced discussions’ with TDR and that if the Board receives a firm offer under the Takeover Code it will recommend unanimously that investors accept it.
Major shareholders are Invesco Asset Management with a 21.8% holding, Capital Group with just under 10%, Aviva (AV.) with just over 7% and Woodford Investment Management also with just over a 7% holding.
BCA is due to announce its preliminary results for the year to 1 April this Wednesday. At its interim results for the six months to 30 September the firm delivered a 22% increase in revenues to £1.43bn and a 24% increase in operating profit to £50.6m, and confirmed that it was on track to meet its profit and growth targets for the full year.
