A US private equity firm tried to leverage fears of a capital gains tax raid in the Budget as it sought to grow its Revolut stake at a heavy discount, City AM can reveal, in a move foiled by the City regulator. 

Jamba Europe, controlled by New York-based HOF Capital, advertised a secondary offer to nearly 3,500 investors in the British banking app earlier this month via the Republic share trading platform.

The offer was scuppered by the Financial Conduct Authority (FCA) over concerns it could be seen as a “financial promotion”, which would need specific regulatory approval, City AM understands.

Republic, formerly known as Seedrs, said it had cancelled Jamba’s offer for the time being but did not agree with the FCA’s ruling.

Jamba solicited offers via Republic with an 18 October deadline and had planned to close the transactions before 29 October, according to a letter to Revolut shareholders, seen by City AM.

The letter noted that this date would be “prior to the announcement of the UK Budget (which is rumoured to include a rise in capital gains tax) on the 30th”.

Chancellor Rachel Reeves is widely expected to raise capital gains tax in Labour’s maiden Budget on Wednesday as she tries to plug an alleged £22bn “black hole” in the public finances. The tax applies to the sale of investments, including company shares.

Jamba’s offer was envisioned as a reverse price auction, meaning shareholders could decide how much they wanted to offer their shares for. Jamba would then have started buying shares from the lowest price upwards.

The letter said Jamba had informed Republic that it considered £407.86 per Revolut share a “reasonable reflection of the current market price”, in line with the weighted average price seen in the last two rounds of trading on the platform.

But that would mark a roughly 38 per cent discount compared to an August employee share sale that landed Revolut a $45bn valuation and cemented the London-based firm’s status as Europe’s most valuable fintech.