Family trusts controlled by Sir David and his brother Nigel, another N Brown board member, sold 12.7 million shares at 400p yesterday, taking the family holding below 50 per cent for the first time since the Manchester- based group floated in 1970. The disposal reduces the Alliance-controlled stake from 57.3 per cent to 48.6 per cent.
Explaining the move, Jim Martin, the group's chief executive, said in an official statement to the Stock Exchange: "The reduction in the Alliance Trust Holdings will increase the liquidity in the company's shares and broaden its register."
However, while the free float of shares in the company has always been tight, it is understood that Sir David has decided to broaden his investment portfolio in anticipation of concerns surrounding the Budget on 2 July being realised. It is thought he will use the money raised to push more of his assets offshore to beat Labour's plans. Analysts are expecting the Chancellor of the Exchequer, Gordon Brown, to cut advance corporation tax, which could hit the value of shares.
The move is ironic, as Mr Martin was quoted in April as saying a Labour victory in the general election in May could spell good news for N Brown. Announcing a 19 per cent rise in annual profits to pounds 37.1m at the time, he said: "I think there might be an impression among many of our customers that it [Labour government] would be in their interests. They might be encouraged to spend more."
Sir David and his brother have prospered under Labour and Conservative governments. Their wealth was put at pounds 385m in the Sunday Times's most recent list of the UK's richest people, ranking them in 40th place, a position built up since Sir David arrived in Britain as a poor immigrant from Tehran in the 1950s.
Better known for his textile interests, he turned what is now Coats Viyella into Britain's largest textile group through a series of acquisitions, but retains only a small stake in the company for which he is famous.
Most of his wealth and, indeed, stock market success, derives from N Brown, which developed from the original JD Williams catalogue operation. Over the past five years, the share price has soared from 150p to 413.5p, down 1p yesterday.
In 1995, Sir David hatched his most audacious plan to date, tabling a pounds 1.1bn joint bid with the Iceland retailing chain for the privately owned Littlewoods stores to catalogue group. Earlier this year N Brown pulled out of talks to buy Sears' Freemans mail order business in an on-off saga also involving Littlewoods.
Yesterday's share sale, announced after the market closed, was carried out by brokers UBS and Barclays de Zoete Wedd.Reuse content