InvestmentsJun 26 2019

Takeover boosts Woodford’s dash for cash

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Takeover boosts Woodford’s dash for cash

Neil Woodford’s bid to raise cash for his suspended Equity Income fund has been boosted by a takeover of one of the companies which is one of the fund's significant investments.

Used vehicle auctioneer BCA Marketplace, in which Woodford Investment Management has a 10 per cent stake, is being taken over by private equity firm TDR.

Woodford Investment Management is the third largest holder of BCA Marketplace stock.

The BCA Marketplace share price has risen from £1.87 to £2.41 over the past month as the takeover interest emerged, and TDR has agreed to pay £2.44 a share for the company. 

The takeover is a boost for Mr Woodford’s attempts to raise sufficient cash to have the suspension on his fund lifted.

Outflows of about £9m every working day in May resulted in Mr Woodford having to suspend his fund on 3 June.

He has spent the time since disposing of stakes in listed companies in order to raise cash, including raising £100m from the sale of less liquid investments, as well as disposing of a variety of stakes in listed companies. 

The fund was initially suspended for 28 days, but the suspension can be renewed. 

The largest single investor in BCA Marketplace, with a 23 per cent holding, is Invesco is where Mr Woodford made his name as a fund manager, and worked for more than 20 years, before departing in 2014 to set up his own firm.