Sir Alan Sugar's purchase of more than £2m of shares in Woolworths, the pic'n'mix retailer, has been scuppered by the Icelandic banking crisis.
Yesterday, it emerged that the transaction by the multimillionaire star of the TV series The Apprentice was not completed, fuelling speculation that a troubled Icelandic bank was unable to deliver the 3.88 per cent shareholding Mr Sugar tried to buy last week.
On 10 October, the stock exchange was notified that Mr Sugar owned 56.7 million shares in Woolworths, worth £2.3m at yesterday's closing price, through his investment vehicle Amsprop. The disclosure lifted the retailer's shares by 29 per cent on the day. But in a statement yesterday, Amsprop said the shares "were not acquired: selling party was unable to deliver the shares".
While it is unclear from whom Mr Sugar tried to buy the shares, City sources suggested that Kaupthing Singer & Friedlander, the collapsed Icelandic bank's UK corporate finance arm, was the vendor. It is understood that Kaupthing Singer & Friedlander owned a direct stake in Woolworths, but this was not above the 3 per cent level that has to be disclosed. Baugur, the beleaguered Icelandic retail investor, which has close links to Kaupthing, owns a 10 per cent stake in Woolworths.
Mr Sugar, who is estimated to have a personal worth of £830m, declined to comment yesterday. He may have paid upfront for the shares – in which case he may now be out of pocket. Kaupthing and Woolworths also did not comment.
Woolworths' shares, which have lost 80 per cent of their value over the past year, rose by 0.02p to 4.08p yesterday.
Mr Sugar made his fortune selling Amstrad home computers in the 1980s, but now makes most of his money through his Amsprop real estate vehicle.
Mr Sugar is not the only person to have had a purchase of shares hit by the Icelandic banking crisis. Joe Lewis, the Bahamas-based billionaire, last week thought he had bought a 25 per cent stake in the pubs chain Mitchells & Butlers for £136m from Robert Tchenguiz, the property tycoon. However, only a 22 per cent shareholding arrived, leading to speculation that the missing 17 million shares, which Mr Lewis did not pay for, were frozen in Kaupthing.
Woolworths is struggling on several fronts. Leading credit insurers have withdrawn the cover they provide to suppliers to trade with the retailer, which is hindering its efforts to fully stock stores before the Christmas period.
This week, Simon Turner, Woolworths' retail and distribution operations director, and Claire Tiney, its group head of human resources, left the company.Reuse content