Shareholders in Telent, a UK telecoms company subject to a £346m (€500m) takeover bid, have forced hedge fund Polygon Investments to unwind the short position it had built to protect its 24% stake, increasing its potential losses if it continues to oppose the offer.

The unwinding comes after Investors in favour of the takeover appealed to shareholders with stock on loan to Polygon to recall their shares. This forced Polygon to unwind its hedge, a short position held through contracts for difference, from 12.43% to 5.2%, according to regulatory announcements.