Barclay brothers buy into Southend

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The Independent Online
DAVID and Frederick Barclay, the reclusive brothers who run their business empire from Monaco, are taking a 12.4 per cent stake in Southend Property Holdings in part-payment for the sale of three properties, writes Alison Eadie.

Southend is paying pounds 31m for 240,000 square feet of office and 10,000 square feet of leisure space in Birmingham, Ealing, London, and Godalming.

The acquisition is being funded by the issue to the vendor of pounds 12m worth of ordinary shares at 90p, pounds 7m convertible unsecured loan stock, conditionally bought by the broker Paribas, and pounds 12m in cash.

In mid-November, Southend had cash in hand of pounds 40m, having raised pounds 24.4m in June through issuing convertible unsecured loan stock.

Ellerman Investments, the Barclay brothers' holding company, will retain its shareholding as a medium- term investment. Malcolm Dagul, chairman of Southend, said he hoped there would be more deals with the Barclays.

He said the company was encouraged by the recent improvement in the commercial investment property market. The properties acquired will contribute an initial pounds 1.4m to profit in the first full year and have the potential for growth in both income and capital.

Southend's pre-tax profits in the six months to the end of September were pounds 1.78m against pounds 1.23m in the previous first half. The interim dividend was 0.8p, as forecast in June.

Southend's shares rose 3p to 92p. The Barclay brothers' interests span property, hotels and the European newspaper.

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