From
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Hedge fund lifts MyTravel stake
14 Sep 2006
US hedge fund Pardus has taken advantage of the dip in MyTravel’s share price to increase its stake in the tour operator to 7.15%. At the start of August it owned 5.1% of the business.
Pardus is known in the investment community as an activist hedge fund – building up stakes in a company in order to force management to unlock value for shareholders. In the States, a different Pardus fund has built up a 14.8% stake in a health club operator Bally getting three of its people onto the nine-man board in the process. It has recently entered into ‘a confidentiality agreement’ with operator.
MyTravel’s shares dropped by up to 20% yesterday (Tues) following its profit warning, although it closed at 188p, a 6.4% drop. At 1pm today it was trading at 187.75p.
Following the profit warning, Citigroup has downgraded MyTravel to ‘hold’ from ‘buy’.
ABN Amro has reduced its forecasts but maintained its ‘hold’ rating. It now expects MyTravel to make a FY operating profit of £58.2m – a 32% reduction – while its target price for the stock has dropped to 205p from 220p.
PP