Natixis's Enigmatic JTC Stake: A Masterclass in Takeover Hedging

LONDON, UK – November 25, 2025

A routine regulatory filing today has pulled back the curtain on the sophisticated financial maneuvering that underpins major corporate takeovers. French financial services giant NATIXIS SA disclosed a significant, yet puzzling, position in JTC plc, the global professional services firm currently under a £2.3 billion acquisition offer. The filing reveals NATIXIS holding both a 1.09% stake in JTC’s shares and an identically sized short position via derivatives—a perfectly balanced, market-neutral stance that offers a masterclass in how institutional investors navigate the risks and rewards of modern M&A.

At first glance, holding a simultaneous long and short position of the exact same magnitude seems counterintuitive. Why bet on a company to succeed and fail at the same time? The answer lies not in a contradictory market view, but in a meticulously crafted strategy designed to isolate profit from specific outcomes while neutralizing broader market risk. This move, executed in the shadow of a major private equity buyout, speaks volumes about the intersection of innovation, strategy, and the bottom line.

The Prize: A High-Growth Target

To understand NATIXIS's complex play, one must first appreciate the prize: JTC plc. Headquartered in Jersey, the firm has become a powerhouse in providing fund, corporate, and private client services. Its growth has been nothing short of spectacular. In its full-year 2024 results, JTC reported an 18.6% surge in revenue to £305.4 million and an 18.4% rise in underlying EBITDA to £101.7 million. This performance, driven by strong organic growth and a disciplined M&A strategy under its "Cosmos era" business plan, did not go unnoticed.

After a competitive bidding process that saw interest from multiple private equity suitors, JTC’s board agreed on November 10 to a recommended all-cash takeover by Papilio Bidco Ltd, a vehicle for the private equity firm Permira. The offer values JTC at 1,340 pence per share, a significant premium that reflects the company's strong fundamentals and future prospects. With the deal expected to close in the third quarter of 2026, an "offer period" was triggered under the UK Takeover Code, placing the company's shares under intense scrutiny.

It is within this high-stakes environment that NATIXIS’s strategy comes into focus. The firm isn't making a simple bet on whether JTC's stock will go up or down; the takeover offer has already largely determined its ceiling. Instead, NATIXIS is playing a different, more nuanced game.

Decoding the Market-Neutral Play

The Form 8.3 disclosure, a requirement for any entity holding over 1% in a company under offer, details NATIXIS’s position as of November 24. It owns 1,877,220 ordinary shares, a direct long position. Simultaneously, it holds a short position on the exact same number of shares through cash-settled derivatives known as Total Return Swaps (TRS).

A TRS is a financial contract where one party agrees to pay the other the “total return”—capital gains plus any dividends—of an underlying asset. In return, they receive a set interest rate payment. By entering into a TRS to short JTC, NATIXIS effectively neutralizes its economic exposure to the share price movement from its physical stock holding. If JTC's stock price falls, the loss on the shares is offset by the gain on the TRS, and vice-versa.

This creates a market-neutral position, but to what end? The primary motivation is almost certainly hedging. While the Permira deal has been recommended by the board, it is not a foregone conclusion. Regulatory hurdles, unexpected market shocks, or shareholder dissent could derail the acquisition, which isn't slated for completion until late 2026. If the deal were to collapse, JTC’s share price would likely plummet from its current offer-supported level. The short TRS acts as an insurance policy against this exact scenario.

Furthermore, the structure allows NATIXIS to profit from the “deal spread.” JTC shares are currently trading around 1,280 pence—the price at which NATIXIS conducted its latest transactions—which is a noticeable discount to the 1,340 pence offer price. This spread represents the time value of money and the residual risk of the deal failing. By locking in a hedged position, NATIXIS can aim to capture this spread as profit if and when the deal successfully closes, all while shielding itself from downside risk. The recent disclosure of selling 141,266 shares while simultaneously reducing its short TRS position by the same amount indicates this is not a passive holding, but an actively managed arbitrage and hedging strategy.

Transparency in the Takeover Spotlight

While the financial engineering is complex, the disclosure itself is a testament to the transparency mandated by the UK’s Takeover Code. Rule 8.3 forces major players to lay their cards on the table during an offer period, preventing the buildup of secret stakes that could unfairly influence the outcome of an acquisition. This is particularly critical when sophisticated derivatives are involved, as they can mask true economic interest.

For other JTC shareholders and the market at large, the NATIXIS filing provides a valuable signal. It demonstrates that a major, sophisticated institution sees value in playing the JTC acquisition but is also keenly aware of the associated risks. The perfectly hedged nature of the position suggests a high degree of confidence that the deal will eventually proceed—otherwise, the complexity and cost of the structure would not be justified—but with a healthy dose of professional prudence.

The heightened trading volume in JTC shares, which saw two million shares change hands on a recent day, underscores the market's intense focus on the stock. For investors, the takeaway is clear: the path to the 1,340 pence offer price is not a straight line. It is a terrain shaped by time, risk, and the intricate strategies of institutional investors who are masters at navigating its contours. NATIXIS's filing is a rare glimpse into that playbook, revealing how the biggest financial innovators protect their capital and seek profit where others might only see uncertainty.