London Stock Exchange
LSE plans $1.6bn rights issue to fund Frank Russell acquisition. Reuters

Qatar Holding is trimming its 15% stake in the owner of the London Stock Exchange by a third, ahead of the British firm's $1.6bn rights issue to help it acquire US indexes group Frank Russell.

The sovereign wealth fund on 9 July instructed Bank of America Merrill Lynch and Citigroup to offload some 5% in the LSE Group (LSEG) through an accelerated book building process, unnamed sources told the Telegraph.

Based on the LSE Group's closing price of 1956 pence a share on 9 July, the 4.83% stake is worth £255m ($436.5m, €320.3m).

On 26 June, the LSEG said it will acquire US-based stock-index and asset-management firm Frank Russell from Northwestern Mutual for $2.7bn.

The purchase will be part-funded through a $1.6bn rights issue to be launched in September 2014, after the approval of the acquisition by shareholders, the LSEG said. The rest of the consideration will be funded from existing and new LSEG bank debt facilities, the firm added.

Qatar Investment Authority (QIA), the investment arm of the Qatar government and the parent company for Qatar Holding, initially bought 20.86% of the London Stock Exchange (LSE) in 2007.