US billionaire Paul E. Singer buys 5.6% stake in Dufry

Dufry, the operator of duty-free shops, has a new major shareholder. American billionaire Paul E. Singer has acquired a 5.57% stake in the Swiss business, according to a regulatory filing presented on Wednesday. The news was well received by shareholders, with Dufry shares rising 3% in the afternoon.

It is understood Singer bought the shares through his hedge fund Elliot Management Corporation and Liverpool Limited as part of a derivatives options trade. Further details about the seller were not disclosed in the filing.

Dufry’s largest shareholders include China’s HNA Group with a 20.9% stake; a shareholder group headed by the Dufry Board of Directors, which as a 20.7% stake in the business; the Qatar Investment Authority (6.9% stake) and luxury group Richemont (5% stake).

This is not the first time US hedge fund manager Paul E. Singer eyes a Swiss company. In 2011 he tried to acquire biopharmaceutical company Actelion, which was bought by Johnson & Johnson this year. Additionally, he has held a stake in investment company BB Biotech.

According to the Financial Times, the shares were acquired from HNA Group. The Chinese conglomerate had recently lent a stake in the Swiss company to a bank in exchange for funding, but the bank sold the underlying Dufry stake to funds, including Singer’s Elliott, to hedge its position. According to the newspaper, HNA cannot reclaim the shares.

HNA is also the largest single shareholder of Deutsche Bank with a share of just under 10%. But the Chinese company has been facing several issues in recent years, as doubts were raised about how the company, which is mainly involved in tourism and aviation, actually finances itself.