Goldman Sachs discloses short position in Philips after Dutch regulator review

AMSTERDAM (Reuters) – The Dutch financial markets watchdog on Monday said its public filings had been updated to reflect that Goldman Sachs held a large gross short position in healthcare equipment maker Philips on Aug. 14, counterbalancing a previously disclosed long position.

The additional disclosure is part of a review by the Financial Markets Authority (AFM) of how investment firm Exor NV managed to acquire a 15% stake in Philips in a surprise move on Aug. 14 without triggering disclosures that it had been building a stake.

Goldman Sachs, which acted on behalf of Exor, could not immediately be reached for comment. The AFM did not suggest any wrongdoing, but said it was considering a rule change.

The review “has led to the additional disclosures of gross short positions by Goldman Sachs in the AFM register”, the agency said in an e-mailed statement.

Dutch newspaper FD first reported on the new disclosures, which were added to the register on Friday.

Shareholder groups, while welcoming Exor’s investment, questioned how the stake had been acquired so quickly. Dutch market rules require disclosures when an investor passes ownership thresholds of more than 3%, 5% and 10% in a public company.

Philips said at the time a bank had acted on behalf of Exor and used a derivatives structure, but it could not comment further. A Philips spokesperson said on Monday that the company had no additional comment.

Exor declined to comment at the time and could not be reached for comment late on Monday.

U.S. Securities and Exchange Commission filings showed Exor had obtained a 2.99% stake in Philips by June 30, just below the Dutch disclosure threshold.

An AFM filing first published on Aug. 17 had showed Goldman Sachs holding a long position of 12.17% in Philips as of Aug. 14, mostly in call options.

That filing has now been revised to show Goldman also was holding an indirect short position of 12.04% on Aug. 14.

That would set the investment bank up to execute either side of the trade, in this case the “buy” side, on behalf of its client, although it is not certain that was what Goldman did.

The AFM said it was now in talks with “market parties and relevant stakeholders to see where guidance, or perhaps new rules, are needed about transaction structures by which large stakes can be taken in publicly listed companies in a very short period of time.”

(Reporting by Toby Sterling; Editing by Jamie Freed)