Changes to Dutch tax rules have scuppered a management buyout of European City Estates.
Chief executive Stephen Cotton has resumed his full-time job at ECE after failing to raise finance for the buyout. Cotton has been frustrated by changes to the Taxation of Legal Transactions Act which have made the MBO’s proposals, that relied upon the formation of limited partnerships, unworkable.
A new bid from “a substantial property company based outside the Netherlands” has led to exploratory negotiations with the company.
Cotton’s bid was chosen from a shortlist of three potential buyers after more than 20 parties expressed an interest in acquiring the company. The bid would have seen shareholders receiving not less than €13.6 (NLG30) per share compared with a net asset value of €15.4 (NLG34) at the time.
ECE’s property portfolio is concentrated in the Benelux countries and Germany and totals around €153m (NLG300m).
