Man Group held a net short position in DCC Plc as of March 26, with 7.75 million shares short. The hedge fund also traded derivatives, pointing to a complex bearish stance on the takeover target.
Man Group PLC filed a Form 8.3 disclosure with the Irish Takeover Panel on March 26, revealing its combined long and short positions in DCC Plc. The filing is required under Rule 8.3 for any person holding interests in relevant securities representing 1% or more of the offeree's total. DCC Plc is the offeree, meaning a takeover process is underway, though the filing does not name the offeror.
The disclosure shows that Man Group held 4,781,628 ordinary shares of DCC long (0.88% of total) and 7,754,967 shares short (1.43% of total). Including stock-settled derivative positions (equity swaps), the hedge fund had an additional 1,190,268 shares long (0.22%) and 14,466 shares short (0.00%). Net of all positions, Man Group is short approximately 1.8 million shares, or 0.33% of DCC's total equity.
That net short in a takeover target is notable. Short sellers typically avoid stocks with a pending bid because the offer premium reduces the probability of a price decline. Man Group's position suggests a view that the takeover will fail, that the offer price is too low, or that the stock will fall after the bid lapses. The derivative overlay complicates the picture.
The Form 8.3 breaks down into two categories: physical shares (direct ownership and lending) and stock-settled derivatives (equity swaps that settle in shares). The table below shows the full exposure:
| Position Type | Long (Shares) | % of Total | Short (Shares) | % of Total |
|---|---|---|---|---|
| Physical Shares | 4,781,628 | 0.88% | 7,754,967 | 1.43% |
| Stock-Settled Derivatives | 1,190,268 | 0.22% | 14,466 | 0.00% |
| Total | 5,971,896 | 1.10% | 7,769,433 | 1.43% |
The stock-settled derivatives represent swaps that would create new shares if exercised. The long leg of these swaps adds to Man Group's economic exposure on the upside, while the short leg is negligible. Combining the two categories, Man Group's net short in physical and derivative terms is 1,797,537 shares.
The physical short of 7.75 million shares is the dominant component. That figure likely includes shares borrowed for delivery to counterparties, either as part of a short sale or as a hedging arrangement. The long physical of 4.78 million shares suggests Man Group also holds a core long position, possibly as a hedge against derivative short exposure or as a separate directional bet.
The stock-settled derivative long of 1.19 million shares is a call-like position: it gives Man Group the right to receive shares at a future date. This position partially offsets the physical short. A short seller holding a long derivative position is typical of a delta-hedged strategy, where the derivative delta is adjusted over time.
The filing also details three cash-settled derivative transactions conducted on March 26:
The closing of a long position suggests Man Group reduced its bullish exposure. The opening of a short position alongside the closing of a short position appears to be a roll or a rebalancing. The prices are tightly clustered around 50p, indicating the trades were executed in a narrow window. These cash-settled derivatives do not involve delivery of physical shares; they settle in cash based on the share price.
A 1.43% short position in a company that is the subject of a takeover offer is unusual. In a typical bid, short interest declines as arbitrageurs buy the target to capture the premium. Short sellers risk unlimited losses if the bid succeeds at a higher price. Man Group's decision to maintain a net short of nearly 1.8 million shares signals a conviction that the takeover either will not close or will close at a price below current market levels.
The Irish Takeover Panel rules require disclosure when a person's interest crosses 1%. This filing is an opening position disclosure, meaning it is the first time Man Group is reporting its position in this takeover context. Future dealing disclosures will show whether the fund is adding to the short or covering.
Netting the long physical and derivative positions against the short gives a net short of 1,797,537 shares, or about 0.33% of DCC's total shares. That is modest in absolute terms but significant given the takeover dynamics. The net short is largely driven by the physical short, which dwarfs the long derivative position.
Man Group's overall position is complex. The long derivative could serve as a hedge: if the stock rises, the derivative gains partially offset the short loss. This suggests the net short is not a pure directional bet but a volatility or event-driven trade. The fund may be betting on the outcome of the takeover rather than on the direction of DCC's business.
Shorting a stock with an active bid carries execution risk. If the bid is successful and the stock jumps to the offer price, the short seller faces a significant loss. Man Group's derivative long position limits that risk. The cash-settled trades on March 26, closing a long position, may indicate the fund is adjusting its hedge after the stock moved.
The three cash-settled trades on March 26 are instructive. Man Group closed a long cash-settled position of 40,590 shares at 50.1405p. That is a reduction in upside exposure. Simultaneously, it closed a short cash-settled position of 5,868 shares and opened a short cash-settled position of the same size at the same price. The net effect is a wash, suggesting a repositioning rather than a directional change.
The filing does not specify the counterparty or the exact nature of the cash-settled derivatives. They are likely CFDs or total return swaps that track the share price. The small size relative to the total position (40,000 vs. 1.2 million long derivative) indicates this was a routine adjustment.
The closing of the long cash-settled position reduces Man Group's upside. If the fund was delta-hedging a short physical position, it may have reduced the hedge as the stock price moved. Alternatively, it could be a tactical trade to realize a gain. The opening and closing of the short cash-settled position at the same price suggests it was a roll or a trade to change the maturity.
What this means: Man Group's filing provides a rare window into a major hedge fund's positioning in a takeover target. The net short is bearish but hedged. The derivative trades point to active management of the exposure. For traders in DCC, the key question is whether Man Group will increase the short or cover it in the coming weeks.
Practical rule: When a fund discloses a net short in a takeover target, look for subsequent dealing disclosures within the next few days. If Man Group adds to the short, it signals increased conviction that the takeover fails. If it reduces the short, the hedge against a successful bid is being lifted.
The Form 8.3 requires that any dealing disclosure be made by 3:30 pm (London time) on the business day following the trade. Traders should watch for new filings from Man Group. The next disclosure will show whether the fund continued to trade on March 27 or later.
The Irish Takeover Panel rules are designed to ensure transparency during a bid. Man Group's disclosure is part of a series of filings from other institutions. Comparing filings from multiple funds can reveal the consensus. If the majority of disclosure show net longs, the market is pricing a successful bid. Man Group stands out as a bearish outlier.
Takeover bids can collapse due to regulatory rejection, shareholder opposition, or financing issues. Man Group's short may reflect a view on one of these risks. The fund's size and expertise in event-driven strategies mean its position should not be ignored.
DCC Plc trades on the London Stock Exchange under ticker DCC. The stock is a sales and marketing group with exposure to energy, healthcare, and technology. The terms of the takeover are not disclosed in this filing. Investors should consult the offer document for details.
The next catalyst is the release of the offer circular or a shareholder vote. Until then, Man Group's filings will be a key data point for traders assessing the probability of the deal's completion.
This article is for informational purposes only and does not constitute investment advice.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.