Don’t ask the SFO, or accountants Grant Thornton, for that matter.
Here’s a long, angry letter sent by the Vincent Tchenquiz camp some months ago to Grant Thornton, forming part of the furious legal dispute between the Tchenguiz Brothers and the SFO.
At the bottom of page 19 you’ll find a section headed “Sainsbury’s proceeds.” It is allegedly the case that when the financial cops pounced — acting on information from GT, who were handling the unwinding of Iceland’s Kaupthing — neither the SFO or GT really understood how the modern stock market works. Read more
Not a good day for financial cops. Hot on the heels of the FSA losing what it probably thought was a slam-dunk insider dealing case, the SFO has now received a withering “Judgement on Costs’ over its toe-curling execution of the Tchenguiz case.
The brothers get substantially all their legal bills paid. Here’s the judgement. Click to read. Read more
Long running saga, this one. Following a ruling last month that Vincent Tchenguiz should not have been arrested on suspicion of defrauding Iceland’s Kaupthing, his brother Robert has now been formally cleared by the High Court in London.
The court has issued a “summary to assist the media.” It’s utterly baffling. Have a read. Read more
It’s difficult to know what to say about the Serious Fraud Office in the wake of its acknowledgement that its officers simply didn’t understand documents that patently cleared the property investor Vincent Tchenguiz of wrong-doing in the collapse of Iceland’s Kaupthing.
Apparently they were “very busy” at the time (Spring last year) and this is just a case of “human error.” Read more
The holding company of Vincent Tchenguiz’s property management arm was forced into administration by its board on Monday, less than a week after the billionaire property tycoon and his brother Robert were arrested by the Serious Fraud Office, reports the FT. Last week, Peverel, the UK’s largest property management company, failed to meet a demand by Bank of America Merrill Lynch to repay corporate debt of about £125m ($202m). Meanwhile, the Telegraph quotes Robert Tchenquiz calling the SFO raids were “a publicity stunt”. Read more
At Vincent Tchenguiz’s Cannes party on Thursday night, sans Vincent Tchenguiz:
From page 75 of the Kaupthing annual report, 2006:
Robert Tchenguiz knows a good deal when he sees one. In fact, it is precisely this business acumen that enabled him to grow an enterprise, which began with rental housing for students and tourists, into one of the most prosperous property groups in the UK. Robert Tchenquiz’s relationship with Kaupthing Bank is characteristic of his eye for sustainable performance. The Investment Banking division has repeatedly demonstrated why Robert Tchenguiz calls on Kaupthing Bank, and it is this reliability and capability to deliver on projects that keeps him coming back time and again. Robert Tchenguiz is known among entrepreneurs for his financial savvy, unconventional funding strategies, and ability to realise a good opportunity when it presents itself. Interestingly enough, these are exactly the same qualities that make Kaupthing Bank his investment bank of choice. Read more
Curzon Street in London’s Mayfair, Wednesday morning:
Here’s an interesting snippet from Thursday’s annual results statement from J Sainsbury, the UK’s third-biggest food retailer:
At 20 March 2010, the value of our freehold property estate was estimated at £9.8 billion. This represents an increase of £2.3 billion in property value since last year of which £1.7 billion is due to a yield improvement but importantly £0.7 billion is due to investment and development activity we have undertaken, less £0.1 billion in relation to the disposal of dry assets. Read more
Globe Pub Company, the ailing pub operator owned by property entrepreneur Robert Tchenguiz, was on the brink of administrative receivership on Wednesday night. The Bank of New York Mellon, which became the trustee to Globe’s bondholders after the group defaulted on a £257m asset-backed loan in April, has lined up Zolfo Cooper as receivers. The appointment, which could be announced on Thursday, would see Globe sold to a new vehicle backed by Heineken. The Dutch brewer could pay £180m to buy the assets. Read more
Further evidence, as if any were needed.
From Thursday’s half year results statement from Mitchells & Butlers, owner of the All Bar One and Harvester chains: Read more
Heineken, the Dutch brewing group, has bought up 30% of the senior debt in Globe Pub Company, the struggling pub operator owned by UK invesetor Robert Tchenguiz, at a sizeable discount. The surprise purchase – announced at the weekend – sees Heineken acquire £60.2m of Globe’s Class A1 securitised debt at an undisclosed discount. It gives the Dutch company a blocking stake in the senior bonds, and a say over Globe’s future. It marks the first time Heineken has built up an economic interest in a pub operator. Read more
Globe Pub Company, the struggling operator owned by Robert Tchenguiz, is facing an uncertain future after the company defaulted on a £257m asset-backed loan. The default comes after the company, which owns more than 400 pubs, failed to remedy a breach of its banking covenants last month. As a result, bondholders can now seek the appointment of an administrative receiver to run the business. Should that happen, Mr Tchenguiz could face the risk of losing control of the business and see his investment wiped out, the FT said. Read more
Part of Icelandic bank Kaupthing’s UK operations were placed in administration on Wednesday as the last big Icelandic bank teetered on the verge of collapse, forcing clients such as financier Robert Tchenguiz to sell positions. Alistair Darling, UK chancellor, placed Kaupthing Singer & Friedlander in administration as the bank attempted to sell assets and loans around the world to stay in business. But Kaupthing’s UK capital markets and investment management units were independent and still operating, said UK regulators. The UK government has pledged legal action against Iceland to recoup some savings of British customers in Icesave, an internet bank owned by Landsbanki, which was seized by the Icelandic regulators this week. Kaupthing earlier agreed to sell its own Kaupthing Edge deposit business to Dutch bank ING, and had been approached with offers for Kaupthing Singer & Friedlander Capital Markets, which is 30% owned by staff. The Treasury emphasised that “savers’ money is safe and secure”. The future of Kaupthing looks bleak even though Geir Haarde, Iceland’s prime minister, said Wednesday night it was “unlikely” the government would seize Kaupthing as it had Landsbanki and Glitnir. Read more
Robert Tchenguiz, the UK-based property entrepreneur, lost £1bn in just 24 hours after being forced to offload his stakes in J Sainsbury and Mitchells & Butlers as the fallout of the Icelandic banking crisis hit corporate UK. Tchenguiz lost up to £600m on the sale of a 10% holding in the UK’s third-biggest supermarket chain and about another £400m on his exit from the pub company. Tchenguiz was forced to sell down a 25.7% stake in M&B on Tuesday night as his financial backer, investment bank Kaupthing Singer & Friedlander, scrambled to sell assets and scale back its loan exposures. Kaupthing, which had bankrolled Tchenguiz’s move this year to turn his derivatives holding in the pub chain into shares, called in the loan. It was unclear whether he had sold the shares on to another party or whether his holding had been caught up in the administration process for KSF, an arm of Icelandic bank Kaupthing. KSF, now under Ernst & Young’s control, spent much of Wednesday morning attempting to place 180m Sainsbury shares for 250p with institutional shareholders. It was unclear whether this had been successful. Read more
UK-based property tycoon Robert Tchenguiz has sold his 25% stake in UK pub group Mitchells & Butlers, illustrating how the financial crisis in Iceland is hitting UK companies. Some 101m shares in the group changed hands on Tuesday night after the formal close of business in London at 130p apiece, compared with a market price of 163p, which had already fallen 12% during the day. Although the stake is understood to belong to Tchenguiz, the actual seller was Iceland’s Kaupthing, which was holding the shares as collateral. The Icelandic bank is one of Tchenguiz’s financial backers and bankrolled his move in July to convert his derivatives holding of 25% into shares in order to stop it being lent to those betting on price falls. But with Icelandic banks being forced to deleverage, Kaupthing has called back the loan it gave to Tchenguiz, who was forced to liquidate his position to raise money. The buyer of the stake was not immediately clear. Shares in M&B are down 74% over the past 12 months and have fallen 25% in the past week. Following Tuesday night’s transaction, Tchenguiz still retains an economic interest of 4.8% in M&B through contracts for differences. More detail on FT Alphaville. Read more
Who said this emergency was just about banks?
Pubs appeared to be have been forced into the toxic mix on Tuesday night as a huge line of Mitchells & Butlers was suddenly on the move. Some 90m shares in the All Bar One operator changed hands after the formal close of business in London at 130p apiece. That compares with a market price of 163p, which had already fallen 12 per cent during the day. Read more
Robert Tchenguiz has bought back the leases on about 80 of the former Laurel pubs and bars he controversially put into administration in March, reports the Daily Telegraph. The Iranian property tycoon placed Laurel and its 383 pubs and restaurants in administration earlier this year but immediately used a move known as a “pre-pack” to buy back 292 sites through new ventures Town & City Pub Company and Bay Restaurant Group. The latest deal means Tchenguiz has taken back control of all but about 10 of the former Laurel sites. Read more
Property tycoon Robert Tchenguiz on Thursday moved against short-sellers in UK pub group Mitchells & Butlers, converting a derivatives holding of almost 26% into shares in order to stop it being lent to those betting on price falls. The move is the latest effort by an investor to limit short-selling as tumbling share prices reinforce claims that shorting is partly to blame. Short-selling – a common hedge fund practice – is already in the sights of regulators amid fears that aggressive shorting contributed to the failures of Bear Stearns and Northern Rock. Tchenguiz has ordered his broker not to lend out stock, making it harder for short-sellers who want to borrow M&B shares to sell and buy back more cheaply. Read more
What is Robert Tchenguiz up to? One minute everyone is muttering about his solvency and he’s been kicked out of the Sunday Times’
Guess Rich List. The next he turns up on the register of Whitbread (through contracts for difference) with a stake of 3 per cent – encouraging everyone to believe there is somehow a break-up bid in the offering.
Mr T’s R20 investment vehicle declared on economic interest in 5.5m Whitbread shares on Friday – an event that came to Markets Live pundit Neil Hume in a clairvoyant moment earlier this week on FT Alphaville. Read more
The future of UK pub group Mitchells & Butlers could be come down to a bid battle between Punch Taverns and a private equity group backed by Robert Tchenguiz, with the UK property entrepreneur preparing to take his stake in M&B to 29.9%. The board of M&B, which faced resignation calls from angry shareholders on Thursday, revealed Wednesday it had received tentative expressions of interest from various parties – including Punch and buy-out groups Apax, Cinven, CVC and Permira, say people close to the situation. These were made in the light of M&B’s decision to launch a strategic review in the wake of its calamitous £391m loss from closing hedging positions required to underpin a now-aborted property joint venture. Tchenguiz, whose R20 investment vehicle had persuaded M&B to enter the ill-fated joint venture, has a 23% stake in M&B, and is one of several investors wanting to see it extract value from its £5bn property portfolio. He has told M&B’s advisers he intends to raise his stake to the highest level possible before a bid is automatically triggered. Separately, the FT reports on M&B’s stormy annual meeting in which chairman Roger Carr apologised to outraged shareholders for the hedging debacle that swallowed two years of the pub group’s profits. Read more
UK pub group Mitchells & Butlers revealed Wednesday it had received approaches from “a number of parties” after it announced a strategic review in light of its £391m pre-tax loss from a closed hedging position. The developments will intensify what was already expected to be a highly charged atmosphere at Thursday’s annual meeting. Punch Taverns is thought to be a likely suitor, although Giles Thorley, Punch’s chief executive, told analysts that Punch had not precipitated M&B’s statement. In its statement, M&B said there was no certainty that any discussions with possible buyers would take place. However, the company was now considered to be in an offer period, it said. An M&B insider said the statement might have been prompted by a request by the UK Takeover Panel for clarification about the strategic review. M&B shares surged 18% to 473p, valuing the company at £1.9bn. It also emerged that Robert Tchenguiz, the property entrepreneur, had lifted his holding by just over 1 percentage point to 23.1%, buying further contracts for difference through his family-owned Violet Capital Trust. Tchenguiz would now “sit and wait,” said one shareholder. Read more
On Monday UK property investor Robert Tchenguiz upped his stake in Mitchells & Butlers by 3 per cent to 22 per cent, spending about £46m in the process. On Tuesday the pubs operator revealed a highly embarrassing £274m post-tax loss related to the closing out of hedges put in place as part of an abortive JV last summer with the very same property entrepreneur.
Somewhat ironically, before the losses were announced, one UK daily paper was suggesting that Tchenguiz’s purchase of a further 12m M&B shares, via contracts for difference, was motivated by a desire to see off speculation that he is in “dire financial straits”. And perhaps to reassert himself as having that magic investment touch? Read more
Having seen its earlier attempts at unlocking the supposedly hidden value in its property portfolio well and truly crunched in the summer, pub operator Mitchells & Butlers on Thursday confirmed it is looking at Plan B – use a real estate investment trust.
Alongside a rather so-so set of year end figures, M&B said it was looking at a REIT structure suggested by its agitated 19 per cent shareholder, Robert Tchenguiz’s R20: Read more
Barclays Capital and Robert Tchenguiz have built a stake in an Australian gold-mining company, Resolute Mining, reports the Telegraph. The move is part of an initiative by BarCap to use $1bn of its own money to make investments in a range of commodity and energy assets around the world. The bank set up a commodities principal investments team a year ago and plans to have 70 per cent of its fund invested by the end of the year. With Tchenguiz, the bank this summer took a 7 per cent stake in Resolute, which is headquartered in Perth and has significant operations in Africa. Read more
A proposed £1bn-plus refinancing of UK supermarket chain Somerfield by UK investor Robert Tchenguiz will not happen for months, if ever, amid crumbling confidence in credit markets – a development that has implications for the attempted takeover of J Sainsbury (in which Mr Tchenguiz is an investor) by Qatari-backed Delta Two. A consortium including Mr Tchenguiz, Apax Partners and Barclays Capital took Somerfield private in late 2005 and raised £850m by splitting off its freehold properties and issuing CMBS against the estate. It is understood the consortium had been seeking to raise well over £1bn, with up to £500m from CMBS. The delay bodes ill for the Sainsbury deal which would be financed by a similar technique of separating Sainsbury properties from the operating company and securitisation of the former. Read more
The volatility in the credit markets claimed another victim on Thursday, as UK group Mitchells & Butlers was forced to shelve a £4.5bn pub joint venture with Robert Tchenguiz, the property billionaire. M&B, owner of restaurants, bowling alleys and the All Bar One chain, had planned to sell Mr Tchenguiz a 50 per cent share of 1,300 pubs with associated rents of £240m a year. The transaction fell apart on Wednesday night after both parties failed to obtain attractive financing. M&B’s board blamed “prevailing market conditions in the debt markets” after banks lined up to back the deal pulled out. It is understood that Royal Bank of Scotland and Citigroup were involved. Read more
Having laid to rest those nasty rumours of an association with former Tory MP David Mellor, Delta Two has another problem.
This one’s in the form of Robert Tchenguiz. The property entrepreneur, who owns 10 per cent of the stock through shares and derivatives, is not impressed by the 600p-a-share indicative offer tabled by the Qatari-backed fund for the grocer, the FT reports on Thursday.
Mr Tchenguiz has, all along, played down his ties to Paul Taylor, who heads the Delta Two fund and with whom Mr Tchenguiz used to work at his Rotch Property vehicle. But the investor last week showed a little leg to the would-be owners of Sainsbury saying publicly that he would not block any fairly priced offer. Read more
Delta Two, the Qatari investment group, has made a 610p a share offer for J Sainsbury, valuing the UK retailer at £12bn, just three months after the UK retailer rejected a high-profile offer from CVC Capital Partners, the private equity group. Paul Taylor, chief executive of Delta Two, which owns 25 per cent of Sainsbury, is understood to have pitched the offer to Sainsbury family members, who own 18 per cent of the company, in Sardinia late last week. The family is said to be unenthusiastic about the offer, but regardless, says Lex, Delta Two may further increase its holding to put pressure on the board, or launch a bid, possibly with Robert Tchenguiz, the UK investor who is believed to have about 10 per cent of Sainsbury. Read more
Property entrepreneur Robert Tchenguiz has doubled his stake in J Sainsbury to £1bn, fuelling speculation of a fresh takeover approach for the supermarket giant, reports The Daily Telegraph. He is understood to have lifted his holding from 5 per cent to 11 per cent amid speculation that Delta Two, the Qatari investment vehicle which recently bought a 25 per cent stake, could launch a bid for the company. Stock market sources said that Mr Tchenguiz bought the £530m holding via derivatives known as contracts for difference. Read more