Although neither side would confirm it, Olympia & York Developments, the private company run by the Reichmann brothers, is negotiating to take a 33% stake in Stanhope Properties.
Stanhope, the USM-quoted company headed by Stuart Lipton, will be issuing £137m of new shares to O&Y at 250p a share. That is the price at which Stanhope was floated last October; the shares are currently trading at 277p.
The deal will bring Stanhope a backer of considerable financial clout — see “Company File” on p11 — and provide O&Y with a European link. O&Y, the developer of Canary Wharf in Docklands, is clearly thinking of further expansion on this side of the Atlantic. The Reichmanns and Stuart Lipton also share a penchant for big projects and quality buildings.
Stanhope is currently involved both in Broadgate and the Royal Docks via Rosehaugh Stanhope Developments, its joint venture with Godfrey Bradman’s Rosehaugh. RSD is also developing Brunswick Wharf and Blackwall Yard in Docklands, with further large-scale projects proposed for Holborn Viaduct in the City and a 120-acre site at King’s Cross.
At the time of its flotation, Stanhope’s pro-forma net assets were put at £113m, excluding the proceeds of the offer. Joint developments in the RSD group loom large, and in the year to June 30 1987 Stanhope’s pre-tax profits were £493,000 on a turnover of £2.4m. Most of the company’s income came from project management, including £1.3m from Stockley Park.
Although Stuart Lipton says that O&Y is just taking an investment in Stanhope, it is likely that the Canadians will want to be represented on the board. And joint projects are also likely in the future.
