The US investor is making a bid for developer Allied London after missing all on Delancey Estates
US investor JER International is making another effort to buy a quoted UK company as it emerged as the second backer behind former Allied London Properties’ chairman Sir Geoffrey Leigh’s attempt to take the company private.
JER is working with Deutsche Bank to draw up a bid for the UK developer which has a portfolio valued at £227m as of the end of June. Allied London concentrates on development with a regeneration thrust and has large schemes underway in the UK in Bracknell and Manchester.
Like many companies in the UK sector, Allied London has been suffering from a large discount to net asset value. This has been aggravated by the 24% stake owned by the Leigh family and the company’s expensive debt.
The former chairman has failed to find a buyer for his 11% stake since he stepped down from the board last year and taking the company private is seen as the only way he can realise his investment.
A detailed offer is not expected to be made for another week or two, but it is understood that Deutsche and JER would end up owning almost 90% of the company if the bid went ahead.
Chairman Howard Stanton and managing director Mike Ingall would continue to run Allied London if the bid was successful.
Allied and JER were both unable to comment.
Sir Geoffrey would initially remain as a passive investor and would not be involved in the day to day management. But the proposed deal is expected to give him an exit over the next one to two years. The Leigh family trusts, which control another 13% of the shares, would be bought out cutting the family’s influence on the company straight away.
Allied London represents JER’s second foray into the UK. The private US investor took the market by storm this summer when it agreed a £150m joint venture with Delancey after threatening to upset an agreed bid for Milner Estates. The Delancey joint venture is expected to be announced before the end of the year.
JER has also made investments into France. In August, JER set up a joint venture with Park Plaza, a US hotel operator to invest up to $100m of equity in hotels in Europe, Central and South America and Asia. JER, headed by Russell Platt in Europe, has $1.5bn earmarked for Europe.
