Odey Asset Management, a leading UK hedge fund, built its stake in Plus500 from 13% to 20% over the past 10 months at prices mainly at or above the current offer.
Combined with shareholders including JP Morgan (5.8%), Investec (4.7%) and other institutions making up 11% of Plus500’s share capital, it may have enough influence to block the bid if it still sees value in the stock.
Alternatively, Odey may view the Playtech offer as an easy exit from what has become an increasingly troublesome investment.
The hedge fund will still profit handsomely, having initially backed Plus500 at its 115p initial public offering (IPO) in July 2013.
Directors of the business including co-founder Alan Gonen and chief executive Gal Haber are recommending shareholders vote in favour of the deal, and together hold 35.6% of the company’s shares.
Shares in the Haifa, Israel-headquartered business have tumbled more than 50% since 18 May when it admitted increased anti-money laundering checks had led to the suspension of some client accounts.
Plus500’s business model had been under intense scrutiny from FT Alphaville over recent months via a 15-part blog series.
Today, it gained 1.7% to 376p, 6% lower than Playtech’s 400p offer, indicating the market remains wary the deal may not be completed.
An Odey-led shareholder revolt or, more seriously, failure to secure regulatory approval are key risks to the deal not going ahead.
A spokesperson acting on behalf of Odey Asset Management did not immediately respond for comment.