Decision expected on long-awaited takeover approach, after months of advice on portfolio value
Speculation has resurfaced that Liberty International may make a takeover approach to Great Portland Estates.
Liberty, led by 74-year-old Donald Gordon, is a 25.5% shareholder in quoted central London specialist GPE. Knight Frank has been advising Liberty on the full value of GPE’s portfolio for several months and a source said Liberty was looking to decide whether to make an offer.
Insignia Richard Ellis began the advisory process for Liberty last year but had to relinquish the role when it merged with CB Hillier Parker, since CBHP was retained as GPE’s valuer.
Liberty (market cap: £2.4bn) already has an office subsidiary, Capital & Counties, with a strategy to build up central London office investments. However, so far Capco has only a handful of central London sites.
In contrast, since Toby Courtauld and Rob Noel joined GPE as chief executive and property director respectively in 2002/03, it has sold £250m of non-core assets, reduced gearing to below 30% and voids to under 3%, while adding two West End development opportunities. The company’s last triple NAV was 270p per share (market cap: £536m).
GPE’s share price fell back to 261.5p by Thursday, despite rising to 265p on Monday on the back of a rumour that Hong Kong businessman Sammy Lee was considering a break-up bid.
A source close to GPE said of the rumour: “The fact that the share price has fallen back shows what the market thinks of the credibility of a bid emerging from this quarter.”That said, there is a surfeit of buyers over sellers and the whole sector is strong in anticipation of REITs.”
