A deal to secure the future of the Investment Property Databank (IPD) drew nearer this week, when seven major financial institutions made a £12.4m offer to buy a third of the business.
A group led by fund manager Hermes, and including Land Securities, Morley and Prudential, has offered £1,650 per share for up to 7,500 of the 23,000 shares.
In May IPD, which collates and publishes financial data on 11,000 properties, discovered that a Reading solicitor acting on behalf of an unnamed party had approached the six agents who each held a 4.9% stake.
It was later discovered the offers were being orchestrated by Kevin Maxwell, the son of financier Robert Maxwell.
Two 4.9% stakes once owned by Chesterton and Cluttons ended up with property entrepreneur Elliott Bernerd.
Rupert Clarke of Hermes, who has led the buying group negotiations, said of the offer: “We have done this to protect the integrity, operational independence and market reputation of IPD.”
The price values the 20-year-old business at £38m and is based upon a multiple of 23 times prospective earnings.
The offer is predicated on a change to the articles of association of IPD, to be put to shareholders in three weeks’ time, that will restrict ownership and share sales.
“The new constitution will ensure we have a diverse group of shareholders and good arrangements for selling,” said founder Rupert Nabarro, who will reduce his holding from 39% to 30%.
Nabarro added that he was not averse to Elliott Bernerd holding 10% of IPD. “We thoroughly welcome his presence.
“I am sure he has got a lot to offer. But it is not desirable for any single investor to hold more than 10%.”
Savills chairman Aubrey Adams, who has expressed some concern at the sales restrictions, said he “now accepted” the new constitution and confirmed that Savills would not be selling its stake.
“We will stay in. IPD has got great long-term value and offers all sorts of opportunities.”
CB Richard Ellis and Atisreal are also expected to keep their stakes, but Knight Frank, Drivers Jonas and DTZ may sell. If they do, each will net around £1.65m.
References: EGi News 21/10/05
