One of Philip Green’s longstanding backers has sold its remaining shares in the group that owns his troubled Arcadia retail business for just £1, company filings reveal.
Taveta Investments, the holding company controlled by Sir Philip’s wife Tina, bought back 8m shares, or 7.76 per cent of its equity, according to documents lodged at Companies House.
The documents did not reveal the identity of the seller but a spokesperson for Lloyds Banking Group confirmed they belonged to a division of the lender.
“This was a legacy HBOS shareholding, from 2002, taken as part of a refinancing agreement at the time,” the person said. “The shareholding was inherited by Lloyds Banking Group following its acquisition of HBOS in 2009.”
The refinancing agreement was the £850m acquisition of Arcadia, at that time a listed company, by Taveta. The deal was bankrolled by HBOS’s corporate lending division, run by Glaswegian Peter Cummings, and included an equity stake in Taveta for which the bank paid £6m.
Holding equity interests in corporate clients is no longer part of Lloyds’ strategy. The stake was passive and did not have rights to management information, voting or a seat on the Taveta board.
However, it did generate substantial dividend income during more prosperous times — most notably in 2005, the year Arcadia paid out £1.3bn to the Greens and other shareholders.
The share sale comes at a sensitive time for Arcadia, which narrowly avoided falling into administration this week after it secured support from landlords for a restructuring that will involve deep rent cuts and store closures. The company now faces a battle to restore sales growth and revive high-street brands including Topshop.
The transaction completed in May, before creditors voted on Arcadia’s restructuring plans, but the documents were only filed in recent days.
Mr Cummings, who retired in 2009 and was banned from banking in 2012 by the Financial Services Authority for his role in the near-collapse of HBOS during the financial crisis, was an early ally of Sir Philip.
He was involved in deals including the 1999 takeover of Sears, which re-established Sir Philip’s reputation in the City and the tycoon’s second bid for Marks and Spencer, which was eventually abandoned.
The share sale is the second time in recent weeks that an investor has offloaded equity back to the company for a nominal sum. In April, US private equity group Leonard Green & Partners sold its 25 per cent stake in Topshop/Topman back to the company for $1, although it does have an option to repurchase it.
The repurchase and cancellation of the 7.76 per cent Taveta stake proportionately increases the interests of other shareholders. According to the company’s last annual return in 2016, these included Paul Coackley, who worked under Sir Philip at Sears and BHS; Arcadia chief executive Ian Grabiner and his cousin, former Taveta chairman Anthony Grabiner; and former BHS executives Ian Allkins and John Readman.
Lady Tina, who is domiciled in Monaco, remains the controlling shareholder, with her stake rising above 90 per cent.
Arcadia declined to comment.