Green mops up shares: Prudential has cut its exposure to Amber Day. Patrick Hosking and Nick Gilbert report

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The Independent Online
ONE OF Amber Day's biggest institutional backers, Prudential Corporation, has largely pulled out of the troubled discount shops group, selling a 5 per cent stake at a price below the prevailing market rate.

The buyer was Amber Day itself, which is extending its estimated pounds 6m of borrowings by pounds 1.7m to mop up the surplus shares.

Prudential's withdrawal is another blow for Amber Day, which has been plagued by bear raiders and whose shares have plunged by three quarters this year.

On Friday Prudential accepted just 27 1/2p a share for 6.1 million Amber Day shares. That day the official market price closed at 31p, down 3p. The sale took place soon after Amber Day's 2 August year-end.

David Thompson, Amber Day's newly recruited finance director, said the purchase was a useful buying opportunity. It would enhance earnings per share, he said, and the financing cost was less than the cost of the forecast dividend for the year just ended of 3.1p per share.

He said the group, which owns the successful What Everyone Wants chain of discount stores, had not needed the approval of Barclays, its lead bank, to buy the shareholding.

The disposal will slash Prudential's exposure to Amber Day. In December, Prudential held 9.5 million shares or 7.8 per cent of the ordinary capital.

At Amber Day's annual meeting last year, shareholders granted it authority to buy its own shares, which are then cancelled.

Shares in the company, which is led by Philip Green, chairman and chief executive, have slid from a high of 126p late last year. In June it downgraded profit expectations and announced the departures of Leslie Warman, its only non-executive director, and Graham Coles, its finance director.

There was brief respite for the shares a week later when In Shops, the Birmingham property group, said it was considering a bid. Two days later it changed its mind.

It is not clear whether Howard Soley, a Prudential fund manager with a substantial holding in Amber Day, has followed suit in selling shares. He could not be contacted.

With the permission of Prudential, he acquired 81,250 shares in Amber Day some years ago. When the shares were riding high last November, his stake was worth more than pounds 100,000. At the current 31p it is worth just over pounds 24,000.

(Photograph omitted)

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