Qatar cuts holding in London Stock Exchange by a third

Qatar Holding is to trim its 15pc stake in the owner of the London Stock Exchange by a third ahead of a $1.6bn rights issue by the British bourse to fund its acquisition of Russell Investments.

The Middle East investor on Wednesday night instructed Citigroup and Bank of America Merrill Lynch to sell a 4.83pc stake in LSE Group in an overnight accelerated bookbuild process.

The sale is expected to have been completed by the time the market opens on Thursday morning, with the shares likely to be sold to a broad range of institutions rather than a single buyer.

Banking sources indicated Qatar Holding, part of the Qatar Investment Authority, will use the cash from the proceeds to maintain a 10pc shareholding in the British bourse without stumping up more cash for the expected rights issue, due to begin in September.

The investment fund is to reduce its stake from 15.13pc to 10.3pc.

Based on the LSE Group’s closing price of £19.56 a share on Wednesday evening, the 4.83pc being sold is worth £255m.

Qatar Holding first took a 20pc stake in the LSE in September 2007. The purchase came at the same time as Borse Dubai bought 28pc of the LSE’s shares from Nasdaq as part of a complex deal to allow the US exchange to take over Nordic rival OMX.

It later emerged the two Middle Eastern investors had been in talks with Clara Furse, the then chief executive of the LSE, for more than six months before taking their respective positions.

Based on the most recently available data, Bourse Dubai currently holds a 20.55pc shareholding in the LSE Group.

In a statement after the market closed, Qatar Holding said the sale was part of “routine portfolio management.”

Spokesmen for Qatar Holding and the LSE Group declined to comment.