Odey Starts Enterprise Inns Position ~ market folly

Wednesday, July 24, 2013

Odey Starts Enterprise Inns Position

Crispin Odey’s hedge fund Odey Asset Management has disclosed a new position in London listed Enterprise Inns (LON: ETI).  Due to trading on July 22nd, Odey hold the equivalent of 5.1% of Enterprise Inns' voting rights, all via contracts for difference (CFDs).  We say ‘equivalent’ because CFDs do not confer voting rights.     

In the past, at least one of Odey’s funds has held a short position in Enterprise Inns.  Back in 2009 the Odey UK Absolute Return Fund, managed by James Hanbury, was short ETI as part of a bet that the UK consumer would suffer from a lack of spending power.   

Larry Robbins’ Glenview Capital had also held a large position in Enterprise Inns held via total return swaps.  The last filing by Glenview on Enterprise Inns that we have seen was made in March 2010 when they held the equivalent of 12.27% voting rights.   

Per Google Finance – “Enterprise Inns plc is engaged in the operation of public houses under the leased and tenanted pub model. This involves the granting of leases to Publicans who operate the pubs as their own businesses and who must pay rent to the Company, purchase beer and other drinks from the Company and enter into income sharing arrangements with the Company in relation to income generated from leisure machines. All of the Company’s public houses are situated in England and Wales. The Company’s subsidiaries include Unique Pub Properties Limited, which is engaged in the ownership of licensed properties, and The Unique Pub Finance Company plc, which include financing acquisitions of licensed property. On December 23, 2011, it completed the sale and leaseback of a portfolio of 17 pubs. In March 2012, Fuller, Smith & Turner P.L.C. completed the purchase of 15 freeholds, tied and tenanted pubs from the Company.”

For more on this fund, head to some of Odey's other recent portfolio activity.

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