Citigroup Entities Surpass 5% Ownership Threshold in Universal Store Holdings (ASX: UNI)

Citigroup's Three Entities Aggregate to Surpass 5% Substantial Shareholder Threshold in UNI

The substantial holder notice filed under the Corporations Act reveals that the 5.24% voting interest in Universal Store Holdings is an aggregate position held across three related Citigroup bodies corporate. Citibank N.A. Sydney Branch, based at Two Park Street, Sydney, holds 432,272 ordinary fully paid shares. Citigroup Global Markets Australia Pty Limited, also located at Two Park Street, Sydney, holds 413,654 shares. The largest stake is held by Citigroup Global Markets Limited, headquartered at Citigroup Centre, 33 Canada Square, Canary Wharf, London, with 3,174,263 shares.

Combined, these entities hold 4,020,189 ordinary fully paid shares, representing 5.2400% voting power in Universal Store Holdings. Under Australian law, when an entity or its associates reach a relevant interest of 5% or more in a listed company, they must lodge a notice of initial substantial holder. The threshold was crossed on 14 July 2026, with the notice dated 16 July 2026, complying with statutory reporting requirements. Ji Hyun Kim signed the notice on behalf of Citigroup Global Markets Australia Pty Limited, contactable at their Sydney office.

Securities Lending Agreements Constitute Majority of Citigroup’s Relevant Interest in Universal Store

A significant aspect of this disclosure is that the relevant interests held by all three Citigroup entities primarily arise from securities lending agreements rather than direct equity ownership for investment. Securities lending involves temporarily transferring securities from a lender to a borrower, usually secured by collateral, with an obligation to return equivalent securities later. Under Australian law, both lenders and certain counterparties may hold a "relevant interest," explaining Citigroup's presence on both sides of some transactions.

Annexure A of the notice outlines that these agreements are governed by industry-standard frameworks such as AMSLA (Australian Master Securities Lending Agreement), GMSLA (Global Master Securities Lending Agreement), and MSLA (Master Securities Lending Agreement). The scheduled return date for loaned securities is unknown, though both lenders and borrowers retain rights for early recall or return under standard terms. Importantly, voting rights during the loan period reside with the borrower without restrictions, meaning Citigroup holds a regulatory relevant interest but not the actual voting control for much of these shares.

Citibank N.A. Sydney Branch Acts as Agent Lender for 432,272 UNI Shares

Citibank N.A. Sydney Branch’s relevant interest of 432,272 shares stems from its role as Agent Lender under a Securities Lending Agency Agreement (SLAA). Acting on behalf of lenders (its clients), it facilitates lending their securities to borrowers. The agent lender manages the lending process but does not own the securities outright.

The agency agreement specifies that lenders set restrictions and parameters such as designated accounts, lendable limits, acceptable collateral, and cash reinvestment policies. Agent lenders retain early recall rights per lender instructions. For termed loans, typically no sales or recalls occur during the loan term. The registered holders of these shares are listed as "Various" parties.

Citigroup Global Markets Australia Holds 413,654 Shares via Lending and Market Transactions

Citigroup Global Markets Australia Pty Limited’s 413,654 shares arise from two sources: securities lending agreements with return obligations and ordinary course on-market contracts without special terms. This indicates some shares may relate to trading or market-making activities. The registered holder is Citicorp Nominees Pty Limited, a custodial nominee commonly used within Citigroup. Acquisition consideration is noted as "Various (Refer Annexure A)," with no specific per-share prices disclosed.

Citigroup Global Markets Limited’s 3,174,263 Shares Constitute Largest Portion of Stake

The largest component of Citigroup’s aggregate relevant interest comes from Citigroup Global Markets Limited, based in London. Holding 3,174,263 shares, this entity’s position arises from securities lending agreements consistent with the overall lending framework. The registered holder is also Citicorp Nominees Pty Limited, indicating a consistent custodial structure. This offshore involvement reflects common global securities lending practices facilitating Australian equity lending across markets and time zones. Consideration details are described as "Various (Refer Annexure A)," with no specific prices publicly disclosed.

Universal Store Holdings Overview and Importance of Institutional Ownership for Investors

Universal Store Holdings Ltd operates a chain of specialty fashion stores targeting young adults under the Universal Store brand. With a nationwide retail network and digital presence, it serves a youth-oriented demographic. Listed on the ASX, the company is followed by institutional and retail investors within the discretionary retail sector, sensitive to consumer confidence, interest rates, and youth employment trends.

The emergence of Citigroup as a substantial holder—primarily via securities lending rather than direct investment—is a notable development. Institutional ownership at this level can influence stock liquidity and borrowing dynamics. Public disclosure of holdings exceeding 5% enhances market transparency. However, since these holdings arise from lending arrangements with return obligations, they do not necessarily reflect Citigroup’s long-term investment view on Universal Store’s fundamentals. The immediate share price impact remains unclear.

Legal Aggregation of Citigroup Entities Under Corporations Act Disclosure Rules

The notice clarifies that multiple Citigroup entities are treated as associates under Australian law, requiring aggregation of their relevant interests when determining substantial shareholder status. Citibank N.A. Sydney Branch, Citigroup Global Markets Australia Pty Limited, and Citigroup Global Markets Limited are identified as associates due to their status as related bodies corporate within the global Citigroup group.

While no single entity holds more than 5% individually, their combined holdings exceed the threshold, triggering the reporting obligation. This aggregation is common among large financial institutions with multiple nominee, custody, lending, and trading arms holding smaller individual stakes that collectively surpass disclosure thresholds. The threshold was crossed on 14 July 2026, with the notice executed on 16 July 2026.

Voting Rights During Securities Lending Period Reside with Borrowers, Not Citigroup

Annexure A explicitly confirms that voting rights attached to loaned securities belong to borrowers during the loan period, with no restrictions. This means that although Citigroup holds a relevant interest for regulatory purposes, the actual voting control for these shares is exercised by borrowers. The scheduled return date for loaned securities is "Unknown," with both lenders and borrowers retaining early recall or return rights. This open-ended arrangement means voting rights could shift if securities are recalled or returned, a key consideration for investors assessing Citigroup’s register presence.

Risks of Securities Lending-Based Substantial Holdings in ASX-Listed Retailers

Investors should recognize that substantial holdings arising from securities lending carry unique risks. Unlike strategic investors, these positions can unwind quickly if securities are returned or recalled, potentially reducing Citigroup’s voting power below the 5% threshold without any market sales.

Universal Store Holdings operates in a cyclical discretionary retail sector facing risks from consumer spending volatility, youth employment fluctuations, and competition from domestic and international fast-fashion retailers. These sector risks exist alongside register-level developments from this disclosure. Acquisition consideration details are described as "Various," preventing calculation of average acquisition cost from public information. Citigroup has stated it will provide detailed agreements to Universal Store Holdings or ASIC upon request.