Kuwait Sells Off Holding

The Kuwaiti government’s investment arm on Monday made its first known sale of a Kuwaiti holding since Iraq’s invasion of Kuwait on Aug. 2.

The sale was “purely an investment decision” and wasn’t aimed at raising cash, said a spokeswoman for the London-based investment arm, the Kuwait Investment Office. She wasn’t identified, in accordance with British practice.

The investment office sold a 10.1% stake in Mount Charlotte Investments PLC to a company controlled by New Zealand financier Ronald A. Brierley for $121 million, Brierley’s company said.

The Kuwait Investment Office has a massive portfolio worth up to an estimated $100 billion and includes major stakes in British, West German and Spanish companies.

On Friday, Kuwait’s finance minister, Sheik Ali al Khalifa al Sabah, said at a London news conference that Kuwait was managing to make do with its liquid assets and if any asset sale was required, “We can handle it with the cooperation of central banks in an orderly and responsible manner.”

Governments have frozen Kuwait’s assets to protect them from Iraq, but Ali said the governments have allowed exiled Kuwaiti institutions to operate “as freely as prudent.”

Brierley Investments said it paid $1.36 per share for the 88.8 million shares of Mount Charlotte owned by the Kuwait investment office.

The purchase lifted Brierley Investment’s Mount Charlotte stake to 39.9% and forced the company under British takeover rules to make a bid for all of Mount Charlotte.

Its offer values all of Mount Charlotte at $1.2 billion.

A Mount Charlotte spokeswoman, who also wasn’t identified, said the company’s board of directors would hold an emergency meeting.

Mount Charlotte, which owns and operates 100 hotels, had a net profit of $72 million on sales of $289 million last year.

Brierley Investments, quoted on the London, New Zealand and Australian stock markets, is an investment company with holdings in a diverse range of industries and markets.