British Land stake in Stanhope prelude to new Broadgate plan

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The Independent Online
OWNERSHIP of the UK's most prestigious office development was thrown into doubt yesterday after British Land acquired a 29.9 per cent stake in Stanhope and said it would be presenting proposals for restructuring the finances of the troubled developer.

If a proposed refinancing of Stanhope is achieved, British Land plans to transfer the Broadgate centre at Liverpool Street, together with a related development at Ludgate Circus, into the British Land Quantum fund, the joint venture it set up last June with George Soros, the market speculator.

John Weston Smith, British Land's finance director, said: 'We have approached Stanhope and they are interested in what we have to say. The deal would be good news for both sets of shareholders.'

Stanhope's shares closed 14p higher at 42p, after it confirmed it would start negotiations. British Land's shares fell 4p to 428p.

Plans to put the developer, headed by Stuart Lipton, on a sounder footing have been complicated by the receivership of Rosehaugh, Stanhope's partner in the Broadgate project, which is its largest asset.

Both parties have pre-emption rights on the other party's stake in the venture, but neither has so far had the resources to buy out the other. Stanhope has been in talks with its bankers for several months.

The deal would be the Quantum venture's largest acquisition since John Ritblat, British Land's chairman, teamed up with Mr Soros with the intention of investing up to pounds 1bn in the UK property market. So far it has spent about pounds 200m.

British Land, the UK's fourth- largest property company, bought the stake yesterday from the Bank of Nova Scotia at an initial 10p per share, costing pounds 5m, with a further payment of pounds 7.3m depending on 'certain circumstances' that were not specified.

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