Billionaire Spurs owner Joe Lewis hikes Bear Stearns stake after losses

08 December 2007

Reclusive billionaire owner of Britain's Tottenham Hotspur Football Club Joe Lewis, who bought a 7 per cent stake in Bear Stearns — one of the world's largest global investment banks and securities trading and brokerage firms — just three months ago, has increased his holding in the struggling Wall Street bank to 8 per cent, even though he has already lost about $100 million (Rs395 crore) on his investment so far.

The 70-year-old Lewis is British-born, but works from the Bahamas. He bought about $860 million worth of Bear Stearns shares in September, making him one of the bank's largest shareholders. But the Bear Stearns share price — already down on last year's highs when he made his initial investment — continued to fall, causing him a notional loss of about $100 million.

Bear Stearns shares lost badly earlier this year, as two of the bank's hedge funds collapsed under the weight of losses on bonds backed by high-risk sub-prime securities. They continued to fall as further sub-prime losses came to light, and especially after an article in The Wall Street Journal described the bank's chief executive James Cayne as an occasional user of marijuana, a charge Cayne denied.

Lewis obviously believes that the shares will rebound after falling by 40 per cent this year; he spent another $120 million recently to acquiring an additional 1 per cent stake in the bank, according to a regulatory filing.

The billionaire investor operates mainly through his firm Tavistock, which owns more than 100 business ventures including golf course developments in Florida. He once held a 30 per cent stake in London's Christie's auction house. Lewis is ranked as Britain's sixteenth-wealthiest person, with a net worth of £2.8 billion ($5.69 billion, Rs22,420 crore).

Analysts say Lewis is betting that Bear Stearns's shares will rise when the worst of America's mortgage meltdown and the resulting credit crunch is over, and the banking industry returns to normal.