While the structure has long existed as a way for investors to raise money from their existing holdings, it has more recently become a popular way of amassing a fresh stake in a company. Investment banks typically hedge their collar position by shorting the stock — borrowing it and selling it on — so they can sell the shares directly to the client to help them build their stake. John Malone’s Liberty Global employed this method five years ago, using collars to build stakes in Dutch cable company Ziggo and UK broadcaster ITV. Bankers said that in the past couple of years it had caught on as a stakebuilding tool with a much broader set of borrowers, such as activist investors. This can present a tricky decision for banks that risk souring corporate relationships by aiding corporate raiders.

https://www.ft.com/content/6bb33298-4172-11e8-93cf-67ac3a6482fd