Greycoat shares soar in bid battle

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SHARES OF property group Greycoat soared yesterday on news of a 29 per cent increase in net asset value to 283p per share, helping the company in its fight against a pounds 218m takeover attempt by rival Delancey Estates, controlled by George Soros.

Greycoat shares closed up 10.9 per cent at 234.5p as the managing director, Peter Thornton, again rejected the Delancey paper bid of 194p per share as "derisory".

Mr Thornton yesterday officially invited higher bids for Greycoat, which has a one-third stake in the NatWest Tower in the City, after confirming on the record that the business was up for sale.

However, he stressed that the decision had been planned, irrespective of the Delancey bid.

Speculation persists that Delancey may make a higher bid, but the favourites to mount a counter bid for Greycoat include rival property groups Hammerson and Land Securities, or a bidder from overseas.

The sale process is being arranged by NM Rothschild, with tenders invited by 19 May.

"We knew when we started our development cycle in 1994 that we'd see increases in this period," said Mr Thornton.

"We started discussions with our shareholders last December and decided the logical time for a sale would be after our surpluses were announced.

"Had Delancey spoken to us they might have gleaned this process was going on, rather than spending a large amount of shareholders' money in launching an aggressive bid."

Analysts said it now looked increasingly unlikely that Delancey would win the bidding for the company.

Several analysts had expected to see Greycoat's net asset value rise, but by a smaller margin.

Ray Jones, a property analyst at Commerzbank, said: "The NAV is very good, well above most people's forecasts."

Floris van Dijkum, a property analyst at Morgan Stanley, added: "Whether Delancey win the company or not, they're going to look very smart because of the 30 per cent gain they'll make on their investment in Greycoat."