A Hong Kong billionaire who owns more than a quarter of the West End landlord Shaftesbury is preparing to sue the group in an escalating dispute over a share placing.
Samuel Tak Lee, who owns 26 per cent of Shaftesbury, has sent the FTSE 250 company a letter before action on a potential £10m lawsuit over the placing, which took place in December 2017.
Mr Tak Lee, who also owns the nearby Langham estate, argues Shaftesbury’s non-pre-emptive placing was carried out “with a view to diluting his ownership interest and making any potential future takeover bid by him more difficult”.
“Key among his concerns is the board’s failure to provide him with any prior notice of the capital raising, despite Mr Lee owning Shaftesbury’s largest shareholding block,” a spokesperson said in a statement.
The row over the £265m placing — in which Mr Lee’s lawyers have also sent draft particulars of claim — is a rare hiccup for the West End landlord, which owns swaths of prime London property including in Carnaby Street, Chinatown and Covent Garden. It is valued by investors for maintaining long-term dividend growth.
Shaftesbury said its board “does not consider the basis of the draft particulars of claim to have any merit” and was “disappointed that Mr Lee is considering this course of action”.
The group added: “In the 17 months since the placing, the board has responded promptly and appropriately to numerous letters from Mr Lee’s lawyers. The board has also extended numerous invitations to enter a dialogue with Mr Lee, yet on each occasion he has chosen not to respond or declined the opportunity to engage directly with the company.”
Mr Lee’s spokesperson maintained that “the board has failed to engage meaningfully with Mr Lee over his concerns at every stage of this process”, adding that the dispute “raises wider issues regarding Shaftesbury’s corporate governance”.
Shaftesbury’s shares were slightly down at 863p by mid-morning on Thursday.
The company has so far avoided the worst of the turmoil affecting the retail sector thanks to the popularity of its West End locations, which include stores, restaurants, pubs and bars. It said in November, however, that growth in income and rental values slowed in the second half of its financial year.
Another shareholder, Norges Bank Investment Management, has been increasing its holdings in Shaftesbury and now owns 25 per cent.
Mr Tak Lee had previously filed a series of lawsuits in Hong Kong relating to his family. His Langham Estate consists of 1.3m sq ft of property north of Oxford Street.
