Embattled UK asset manager Woodford Investment Management sold most of its 23 per cent stake in Irish life sciences investment company Malin Corp on Tuesday, according to sources.
The move sent Malin’s shares soaring 24 per cent to €3.60, as it removed a major concern that had been weighing on the stock in recent months.
Woodford was behind the placement of some 9.1 million of Malin shares on the stock market in early trading on Tuesday at €3.10 a piece, according to the sources. That suggests that Woodford continues to hold about 1.7 million shares, or about a 3.7 per cent stake.
The transaction was carried out by traders in Dublin-based stockbroker Davy, the sources said.
Woodford blocked investors taking money out of its main fund, led by once-revered stock picker Neil Woodford, in June as it struggled to cope with client withdrawals. It has pledged to sell off shares in companies that aren’t frequently traded as well as unquoted firms, which had driven as much as a 60 per cent per cent slump in Malin’s share price over three months.
Speaking to The Irish Times earlier this month after Malin reported sits first-half results, chief executive Darragh Lyons said he expects a "resolution to the Woodford situation in the short term" in the investment fund either committing to retaining its stake or opting to sell.
"It's key that the uncertainty is resolved," Mr Lyons said at the time, adding that Malin has been working on building up investor demand for the stock, which is trading at a "huge discount".
The Malin share placement came a day after the authorised corporate director of Woodford’s flagship equity income fund said that investor withdrawals will continue to be frozen until December.
The fund has lost 12.8 per cent of its value since its suspension in early June, according to Link Fund Solutions, corporate director. By contrast, the benchmark FTSE All Share delivered a 4.3 per cent total return over the same period.
In an in investor update on Monday, Woodford said: “We are very sorry for the continued suspension and understand the concern it will be causing investors. We remain fully committed to getting the fund into a position that delivers the best possible outcomes for our investors - for those who wish to withdraw their money from the fund when it reopens and for those who wish to stay.”
Woodford was an early backer of Malin, which raised €330 million selling shares at €10 each in its initial public offering in March 2015. The Irish company was subject of a board and management overhaul last year that led to a refocusing of its disparate portfolio of investments around four priority assets.
These included stakes in: Poseida Therapeutics, which is developing a treatment for bone marrow cancer; Immunocore; Kymab, which is working on a treatment of eczema; and Viamet, which focuses on antifungal products.