Bottom Line: Stanhope fights another day

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The Independent Online
JOHN RITBLAT is enjoying himself. After giving the property market a shot in the arm last summer by joining forces with George Soros in a pounds 1bn investment fund, he now threatens to confound the sceptics further by untying the gordian knot of the Broadgate Centre.

Since Rosehaugh went into receivership in December 1992, the complex pre-emption rights attaching to its joint venture with Stanhope have kept the City's leading office development hovering in limbo.

Neither Rosehaugh's receivers, KPMG Peat Marwick, nor Stuart Lipton's Stanhope wanted to give up the chance of owning the whole caboodle ahead of a resurgence in property values, but neither has had the funds to buy out its partner. Result: stagnation.

The acquisition by British Land of a 29.9 per cent stake in Stanhope changes all that, and the company is candid about its goal - complete ownership of both Broadgate and Ludgate, its sister development near St Paul's.

It is early days, but British Land will probably provide the funds for Stanhope to buy out Rosehaugh. It will then take the phases of Broadgate that have not yet been sold, along with Ludgate, and inject them into the Quantum venture.

What is not clear is how much it will have to pay to do so, which goes part of the way to explaining the stock market's listless reaction to the deal, knocking 4p off British Land's share price to close at 428p. Having paid only an initial pounds 5m for the stake, however, it has little to lose.

Stanhope, on the other hand, is left smaller, chastened and free to start again. The 14p jump in its shares to 42p confirms that, despite its negative net assets and a string of losses, Stanhope will almost certainly, and against all the odds, live to fight another day.

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