Aberdeen Asset Management , the fund manager at the centre of the split-capital investment trust scandal, has failed to sell its property funds management business to British Land in a deal that had been expected to net £100m.
Aberdeen, which has been trying to auction assets in order to reduce debt, is expected to admit this week that the two sides have been unable to reach agreement over the sale of Aberdeen Property Investors (API).
British Land has told Aberdeen it is only interested in buying API's UK division and the European business outside Scandinavia.
API, which has £6.5bn of property under management, was put up for sale in November last year. Aberdeen had been hoping to raise £125m through a sale or flotation aimed at helping to reduce Aberdeen's debt mountain, which then stood at £250m.
British Land is understood to have offered only £45m for the parts of the business it wanted. The unwanted Scandinavian assets made up almost 50 per cent of API's profits last year.
Aberdeen is unwilling to split up the business, and feels £45m for half of the business was unacceptably low. A company spokesperson said: "We will make a Stock Exchange announcement in due course, but we have always said we were not prepared to sell API or any part of it too cheaply." British Land, which hoped to pick up the business in order to gain a foothold in the property asset management business, refused to comment.
Aberdeen is thought to have the backing of Bank of Scotland, its sole lender, in its decision to abandon the deal. Aberdeen reduced debt earlier this year with the £86.6m sale of six unit trusts to its rival New Star Asset Management.
Aberdeen, along with many other providers of split caps, is being investigated by the Financial Services Authority. The watchdog is seeking to establish whether the products were mis-sold and whether a "magic circle" of fund managers colluded to artificially inflate the share prices of the trusts.Reuse content