MEPC to drop overseas assets and slash dividend

MEPC, Britain's third-largest property company, yesterday announced radical plans to dispose of all its overseas assets and slash the dividend in the wake of investor dissatisfaction over the group's performance. The group will return to shareholders at least pounds 300m of the pounds 568m proceeds expected to be raised from the sale or flotation of its Australian and US operations, a minimum of 72p a share, leaving it entirely focused on the UK.

Despite the news, in the middle of the group's pounds 247m agreed bid for property rival, PSIT, the shares rose just 4p to 498.5p yesterday. Analysts said question marks remain over the group's strategy.

James Tuckey, chief executive, yesterday admitted that there had been a change of direction, but denied that he had bowed to market pressure. "Any decent business has a strategy and a strategy which is capable of being changed if circumstances warrant such a change."

MEPC, which has not raised the dividend for six years, said it would maintain this year's payment at 20p, cutting it to 12p in 1998 to enable it to rise over time.

Goldman Sachs has been appointed to sell the US assets, with Barclays de Zoete Wedd being taken on for the Australian deal. Though accounting for 30 per cent of MEPC's pounds 3.4bn property portfolio, the two regions generate 48 per cent of the group's earnings.