US asset management conglomerate Capital Group has taken a 5.4% stake in London-listed broker Plus500.
The company put out an RNS via the London Stock Exchange on Thursday morning confirming the purchase.
Any company that acquires more than 3% of a firm listed on the exchange must notify the public about it via the exchange’s RNS.
The filing shows that Capital Group surpassed the 3% limit on Tuesday this week. The US firm, which is based in Los Angeles, now controls just north of 5.4% of the voting rights in Plus500. It held no shares in the company previously.
At current market prices, the purchase price would be in the region of £133.2m ($180.3m).
Based on data in Plus500’s most recent annual report, this would make Capital Group the third-largest shareholder in the Israeli broker, behind BlackRock and JP Morgan, who held 6.7% and 5.5% of the company’s voting rights respectively in March of this year.
However, it’s worth noting that the BlackRock position may be wholly passive and the result of buying the company’s shares via ETFs. In contrast, Capital’s stake is active – someone at the group wanted to invest in the broker.
Plus500 shares have performed well but the firm is arguably still undervalued
In some ways that should not be surprising.
Since listing in 2013, Plus500 has regularly been one of the best performing companies on the London Stock Exchange. Shares in the broker have risen over 300% in the last five years on a total-return basis.
Despite this, the company has arguably been undervalued for a long-time. Like other industry peers, such as IG Group or CMC Markets, the firm has traded on a low earnings multiple.
CEO David Zruia has hinted in the past about the company listing in the US but that is yet to happen. It’s plausible it could down the line, particularly if the firm continues to grow its futures business in the country.
