“It looks to me,” the Australian CNBC presenter began her interview with UGL chief executive Richard Leupen this week, “like some form of a distressed asset you’ve picked up.”
Ouch.
Leupen, to his credit, batted that one away: “It ended as a distressed asset,” he said, noting that DTZ was in a much less financially embarrassed position when the Australian infrastructure firm first cast an eye over the business as many as four years ago.
Leupen clearly knows a thing or two about keeping staff onside. After all, he’s run UGL, a business of 48,000 people, for a decade. Adding another 4,700 won’t phase him. And this week he was making the right noises in an effort to keep them all onside.
He emphasised the importance of property to what is a highly diversified business: after the “complementary” transaction, real estate will rise from 30% to 40% as a proportion of UGL’s revenue. “Without DTZ it would have been very hard to be doing what we have just done,” he said. “Property as a service is something that will be around for the next 2,000 years, as it has been around for the last 2,000.”
Leupen also talked of UGL’s focus on China and the importance of DTZ’s number one position in perhaps the world’s most important economy. And he praised individual service lines, especially research and valuation.
He even held out the prospect that there may be further deals to be done in this space. UGL is looking at other property assets, and it is looking at Europe too. Given its preference for investing in English-speaking countries, that may not be too far away.
The deal, he concluded rousingly, “complements who we are”.
DTZ chief executive John Forrester and his senior team have done a good job in holding on to clients and to talent during a supremely challenging time. Some shareholders may be understandably angry at seeing the value of their holdings utterly disintegrate, but most view the deal as the best that could be achieved under the circumstances.
But could that good work be undone as DTZ enters the crucial 100 day-integration period? There is a clear and present danger that it could happen.
Take Leupen’s words at face value and staff will be looked after. Clients will be as well served as they have been in the past. But if DTZ is to put this troubled period behind it and grow, then capitalising on a still-respected brand name will be of paramount importance.
In short, will Leupen be able to resist consigning the DTZ brand name to the dustbin?
We should know by MIPIM. Let’s hope he is persuaded that if UGL wants to make a name for itself in property in Europe and China, it needs to do so under someone else’s moniker.
A last word on DTZ and one of credit to SGP if, as Estates Gazette understands, its DTZ board representatives voted for a deal that destroyed the lion’s share of the £100m it had invested in the business. There may have been no plan B, and it could have acted more decisively earlier, but it was still a brave and commendable call to see their own shareholding destroyed but the business survive.
Congratulations to all the winners at this week’s EG Awards. It is a more diverse bunch of winners than in recent years. Only one business, Westfield, picked up two prizes. The others are all single-gong holders – surely a real sign of strength in depth.
