Ashley seizes on Odey crisis to snap up £75m AO stake

Business

The crisis-hit hedge fund Odey Asset Management has offloaded its stake in AO, the London-listed electrical goods retailer, suggesting that it may be unable to stall a fire-sale of assets amid a wave of sexual misconduct allegations against its founder.

Sky News has learnt that the firm set up by Crispin Odey was the seller of nearly 19% of AO to Frasers Group, the high street retailer founded by the billionaire tycoon Mike Ashley.

The transaction cost Mr Ashley’s Frasers Group £75m, it said in a statement on Friday night.

Odey Asset Management’s identity as the seller was confirmed by other shareholders.

One insider said that Odey had been a supportive investor in AO since its stock market debut in London in 2014, and had increased its holding as part of a capital-raise last year.

It is thought to have offloaded its entire stake, held in a fund managed by James Hanbury, one of its senior portfolio managers, to Frasers.

This weekend, it was unclear whether Mr Hanbury was in the process of liquidating other positions.

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A spokesman for Odey declined to comment on the issue or on the level of client redemptions the firm was experiencing.

The crisis has been triggered by a torrent of sexual abuse and harassment allegations made in the Financial Times against its eponymous founder.

The claims, which Mr Odey told the newspaper he disputed, have prompted a number of investment banks which offer so-called prime broking services to his firm to sever ties with it.

The Financial Conduct Authority is also said to have broadened an existing investigation into the hedge fund.

In a statement this week, Odey Asset Management said it “cannot comment in detail on the various allegations which are being looked into by our lawyers”.

“OAM has robust policies and procedures in place to ensure that the firm at all times complies with all of its legal and regulatory obligations.

“Staff wellbeing is central to the culture of OAM’s business.

“We do not recognise the picture of the firm that has been painted by the Financial Times.”

It added that it was “in active discussions with all service providers and we are confident that our service providers will continue to work with us to ensure that the interests of investors are protected”.

For Mr Ashley, the swoop on AO represents the kind of opportunistic trade for which he has become renowned.

The former Newcastle United FC owner has long coveted a stake in the business, and his son-in-law, Michael Murray, who now runs Frasers, said in a statement: “We are delighted to have the opportunity to form a supportive, strategic partnership”.

“AO is a fantastic business with a clear strategy which is leading the market in online-only electricals.”

The purchase of its AO stake adds the company to a list of minority holdings for Frasers which includes ASOS, the struggling online fashion retailer, and Mulberry, the luxury handbag retailer.

Either Liberum and Numis, Frasers’ brokers, are likely to have been involved in executing the trade on behalf of Mr Ashley’s company.

AO and Frasers both declined to comment.

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