Nomura Sells Standard Chartered Stake Valued at $500 Million

(Bloomberg) -- Nomura Holdings Inc. disposed of a stake in Standard Chartered Plc valued at almost $500 million on behalf of an unidentified investor, according to people familiar with the matter.

Nomura was selling shares linked to the closing of a hedged transaction, the people said, asking not to be identified as the details aren't public. The selling shareholder had previously acquired the stake in Standard Chartered through derivative transactions with the Japanese investment bank, they said.

About 52.1 million shares, accounting for about 1.6 percent of Standard Chartered's outstanding stock, were sold at 725 pence, according to terms of the transaction, the low end of a previously announced target range. The sale, which began after markets closed on Thursday and ended a few hours later, had demand for all the shares on offer. Barclays Plc was sole bookrunner.

A spokeswoman for Nomura declined to comment.

Investors can use margin loans and derivative transactions with investment banks to fund their stake purchases in public companies. The stakes are often held by the bank that structures the deal on the buyer's behalf. Indian billionaire Anil Agarwal used a mandatory exchangeable bond -- bonds that can be exchanged for shares in a company other than the one that issues them -- to fund his 2 billion pound ($2.6 billion) stake purchase in Anglo American Plc earlier this year.

Nomura has been exiting operations including European equity research and underwriting and trimming areas such as leveraged finance in the U.S. to cope with market headwinds and regulatory uncertainty. Japan's biggest brokerage this week reported net income was 61.3 billion yen ($551 million) for the first quarter, rebounding from a 19.2 billion yen loss a year earlier.

Shares of Standard Chartered, a British-based bank that makes most of its revenue in Asia, fell 1.3 percent to 731.8 pence at 1:22 p.m. in London. Nomura is exiting the holding after Standard Chartered shares rallied earlier this week, when the bank beat first-quarter profit estimates. The bank posted its strongest growth in transaction banking revenue in more than three years.

Standard Chartered had gained about 31 percent in the last 12 months through Thursday, though it still trades at a steep discount to book value. In August, the U.K. lender said it would probably miss a profitability target set less than a year earlier, blaming an uncertain regulatory and economic environment.

Additional stock sales in Europe raised $34 billion this year, as shareholders took advantage of brief market windows to dispose of stakes, according to data compiled by Bloomberg. UBS Group AG ranked first in managing the sales.

--With assistance from Stephen Morris

To contact the reporter on this story: Ruth David in London at rdavid9@bloomberg.net.

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Keith Campbell, Amy Thomson