Merger Monday is looming into view. Under new Takeover Panel rules, corporate predators must “put up or shut up” – to use the Panel’s surprisingly colloquial language – within 28 days when circling prey. The new rule bit on 19 September, so active predators have until 5pm on Monday to themselves bite.
Mooted transactions involving DTZ, MWB Business Exchange, Invista and Picton are among those affected. Will clarity reign by 5:01pm? Unlikely, as wriggle room exists. While firms will be required to confirm their intention – or not – to make an offer, the panel can consent to an extension of the deadline. Should another predator step in, those rules go out the window. Clear? I’m sure we’ll all get used to it.
Nevertheless, expect news from SGP as it circles DTZ, MWB as it eyes MWB Business Exchange and Picton as it continues to sniff around Invista Foundation Property Trust.
But that’s based on an orderly, regulator-imposed timetable. And since the Takeover Panel rule took effect, the markets have been anything but orderly.
On 19 September, the day the new rules were introduced, the FTSE 100 opened at 5,290 points. By 4 October the index had sunk to 4,882 points. By lunchtime on 14 October it was back topping 5,400 points. Rollercoaster is a much overused word in a markets context, but you can understand why so many commentators reach for it these days.
So will the Picton listed trust’s, formerly the ING UK Real Estate Income Trust, non-binding, indicative proposal of a merger with the £426m Invista vehicle go through? Will SGP’s move for DTZ proceed? And will MWB’s £52m punt on MWB Business Exchange complete?
It’s hard to imagine all three coming off, given the uncertainty out there. But stranger things happen nowadays.
“There will almost certainly never be a greater test of the depth of investor appetite in the City than that being seen in the final quarter of this year,” my colleague James Buckley writes in this week’s London and City Focus (p86). “Mouth-watering buildings such as Drapers Gardens, EC2, Tower 42, EC2, the Lloyd’s Building, EC3, and the £1bn KanAm portfolio are all available.” Some £5bn of stock is officially on the market, with the same amount thought to be available unofficially.
It is a pivotal moment and a Cushman & Wakefield report out this week puts it into sharp focus. A high of £1.9bn of City and Docklands property was transacted in 32 deals in Q2. In Q3 16 transactions turned over just £740m. Of those, two related to hotel investments and one a residential conversion.
As Bill Tyser, head of City investment at Cushman & Wakefield, says: “All eyes will now be on how the market tackles the increase in available investments in Q4.”
PwC begins refurbishing its iconic West End HQ Embankment Place next month. It’s a sign of the times. More and more firms are looking at the cost of refurbishment versus the cost of moving. And more and more will follow in PwC’s footsteps and conclude it’s better to stay put.
A rattled Peter Vernon called on Thursday, pleading for help. The Grosvenor chief executive had been kidnapped; worse, it was by his own staff. “I’m calling in some desperation,” he said, slightly breathlessly. “I’m sitting in a room chained up and padlocked.”
Thursday was, of course, LandAid Day and Vernon was one of many in the industry raising money for the charity’s valuable work in supporting the young and disadvantaged.
LandAid hopes to raise £125,000 from the day. If you haven’t yet donated, waste no more time and go to www.landaid.org.
For the record, Vernon was eventually released, having smashed his £750 target and raised £3,200 and counting.
