Family members of Turkey’s two largest conglomerates sell stakes in companies

ISTANBUL

The founding family members of Turkey’s Koç Holding and some non-management members of the family of another leading conglomerate, Sabancı Holding, have decided to sell stakes in the firms. 

Shares in the company fell sharply on May 25 following the related announcements. 

Members of the Koç family are selling shares worth nearly $480 million in the firm, according to a statement filed with the Istanbul stock exchange on May 25.

Koç Holding has interests in banking, automotive and white goods companies and operates Turkey’s main refiner, Tüpraş. The sale comes as Turkish equity prices have powered to record highs, buoyed by strong performances in overseas markets.

Members of the Koç family are selling a 4.22 percent stake in the conglomerate, with the price set at 15.87 Turkish Liras per share, according to the statement, Reuters reported.

That values the stake at 1.7 billion liras ($478.23 million). The founding family will retain more than 11 percent of the company.

The sale, to foreign corporate investors via a private placement, represents a 6.8 percent discount from the May 24 closing price of 17.02 liras.

Shares of Koç, which as of May 24’s close had risen 25 percent since the start of the year, dropped 6 percent on May 25 to 16 liras. The main Istanbul share index was 0.41 percent lower.

The sale was conducted through accelerated book building led by Citigroup, Reuters reported. 

Some members of the Sabancı family reportedly authorized the company to sell $100 million in stakes, Ünlü&Co reported May 25, while predicting that the sale would be about 4 percent lower than the price at the close of May 24 trading, Reuters reported.

Sabancı shares closed May 24 trading at 11.1 liras. The share price regressed to 10.82 liras early on May 25 trading following the announcement. 

According to the Ünlü&Co announcement, a total of 21 global corporate investors will take part in the sale transaction. 

Sabancı Holding told Reuters that the respective stake sale was not made by any family members who are currently in the company management and that the shareholder rate in the transaction in question was under the compulsory announcement threshold. 

Accordingly, Sabancı Holding will not make an announcement to the stock exchange regarding the issue, the company added. 

The two companies’ share were the most traded shares in early trading on May 25.