Andrew Perloff thrives on complex deals. With three corporate raids behind him, he is eyeing a fourth. Karen Lennox reports.
Self-styled corporate marauder Andrew Perloff is preparing to pounce. Over the past few months his company, Panther Securities, has quietly built up a 25% stake inAIM-quoted Wynnstay, an investorin secondary property.
Perloff thinks that Wynnstay’s management costs are too high and that the company is ripe for a shake-up. “They perceive us to be a predator, which is probably right,” he said. As Wynnstay’s largest shareholder, Perloff has now asked for a seat on the board.
Perloff floated Panther Securities in 1993 and, like many others coming to the market at the time, had big ambitions to become a dealmaker. With Panther’s market value standing at just £16m, few took him seriously.
Four years on, the cheeky entrepreneur has launched three hostile takeover bids and is eyeing a fourth. High-risk strategies and complex deals are, he says, what makes him tick.
None of the raids were big-bucks deals, but they have splashed Panther’s name across national newspapers, giving it far more exposure than such a small company would otherwise deserve.
Its £20.5m market capitalisation has hardly moved since flotation.
Perloff has developed a familiar battle cry for his corporate campaigns. He wants to rescue small shareholders from underperforming management, and make a killing for Panther in the process.
His first – and so far only successful bid – was for ailing BES company Etonbrook, which Panther finally won control of in 1995. This was followed by an unsuccessful bid for Wimbledon department store Elys.
His most recent attack was a raid on the Exmoor Dual Investment Trust. Perloff claimed that the fund managers were underperforming and offered shareholders a way out (see “Exmoor dual”).
The bid for EDIT has reached an impasse and Perloff is saddled with a near 30% stake in the trust, although Panther itself is not exposed. The stake was actually bought by Perloff and partner Malcolm Bloch’s private pension scheme.
Having private and public interests so closely entwined may raise eyebrows, if not hackles, among some of the City’s old school. Perloff and Bloch control three- quarters of Panther’s shares and it can hardly be classed as a truly public company.
Since flotation, he has not really made use of the quote. So far he has not called on shareholders to fund deals.
Perloff insists that he remains first and foremost a property player, and all his corporate raids have a strong property angle.
His bid for the ailing Elys store, for example, was based on the belief that management could use the shop’s space more effectively to boost trading. In the books at £7.9m, the first revaluation since 1977 showed the store had actually fallen in value by £1.5m at the time of his bid.
Perloff was convinced that the valuation would push the board, and the controlling family members, to sell. Butit did not.
“We used every trick in the book,” said Perloff, even complaining to the Attorney General about the way Elys’ controlling charitable trusts were run.
But Panther did not walk away empty- handed. Morley’s, another small store operator, eventually took over Elys and bought Panther’s stake for £6m.
Perloff spent most of the £600,000 profit from the Elys bid on an office in Coventry. An ageing building with 60 tenants that have just a few years on their leases, it was a classic Panther stock – the kind of thing no one else would touch with a barge pole.
He paid just £3.15m for it, giving him an attractive initial yield of 20%. A bit of active management and a few long-term visionary redevelopment ideas will turn it into another nice little earner, he insisted.
Perloff has also just sold one of the Etonbrook properties, a block in Featherstone Street, EC2, for £900,000 – £550,000 more than the end-1996 book valuation. He tapped into the trendy office-to-residential conversion market and won planning permission for lofts above a bar/restaurant on the ground floor.
Perloff is now aiming for his pi`ce de r
