British Land spoils Slough bid with stake in Bredero: Analysts read move as beginning of bid for Mobbs' group

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BRITISH LAND continued its run of surprising corporate moves yesterday when it intervened in Slough Estates' recommended bid for its troubled associate Bredero, buying a 6.9 per cent stake in the developer from Scottish Amicable.

The acquisition, which throws into doubt Slough's ability to make the bid unconditional, follows the acquisition earlier this year of a 29.9 per cent stake in Stanhope. Analysts said the acquisition made little sense unless it was a first move in a possible bid for Slough, which many in the City perceive to have been slow to exploit opportunities in last year's rising property market.

Slough tapped shareholders for pounds 147m in March 1993 but by March of this year Sir Nigel Mobbs, chairman, was criticising the extravagant prices being asked by sellers of properties.

He said the company would concentrate on developing its existing portfolio.

Slough, which owned 49.5 per cent of Bredero before launching a bid for the remaining shares last month, refused to comment on British Land's move.

Without 90 per cent acceptances, Slough could be forced to maintain a separate listing for Bredero and would be unable to integrate the company.

Slough's bid crystallised a pounds 40m loss on its investment in the struggling retail developer. Its offer, pitched at 10p a share, valued Bredero at just pounds 3.6m, which compared with a negative net worth of 9p a share.

Bredero was brought down by an ambitious mixed office and retail scheme at Hammersmith Broadway in west London.

British Land's recent acquisition of the stake in Stanhope, owner of the Broadgate complex in the City, showed that John Ritblat, the chairman, is no stranger to aggressive interventions.

British Land made it clear that its motive for taking the Stanhope stake was to lever control of Broadgate. Earlier this week, however, BL appeared to be stepping back when Mr Ritblat said the higher cost of long-term borrowing made holding the development less attractive.