Australians in £585m battle for Chelsfield

Multiplex to tee off bidding war with Westfield for UK property developer. Clayton Hirst surveys the greens
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The Independent Online

Multiplex, the Australian construction giant, is this weekend mulling a £585m-plus knockout bid for property company Chelsfield.

Multiplex, the Australian construction giant, is this weekend mulling a £585m-plus knockout bid for property company Chelsfield.

Executives from Multiplex are understood to be in London weighing up whether to match or beat an offer made on Thursday by Australian shopping centre developer Westfield.

If Multiplex enters the fray, it will trigger a bidding battle for Chelsfield as Westfield is understood to be prepared to raise its offer if it is trumped.

Chelsfield's board, chaired by Elliott Bernerd, will meet early this week to discuss Westfield's offer. Westfield is hoping Chelsfield will recommend its offer to shareholders. But a well-placed source said Chelsfield is likely to sit on its hands "to further establish the true value of the company". In other words: wait for a possible counter-bid.

Multiplex already owns 7 per cent of Duelguide, the private company that owns Chelsfield. Because of this, if Multiplex matches Westfield's offer, it would be automatically selected as the winner of Chelsfield.

Multiplex is thought to be keen to bid for Chelsfield to secure future construction contracts. The Australian company is building Chelsfield's huge White City mixed-use development in west London. Investment bank Merrill Lynch said that Multiplex might miss out on future contracts - such as a major new development project at Stratford, east London - if Westfield bought Chelsfield.

However, a bid for Chelsfield would stretch Multiplex. Last week the company made a A$1.3bn (£525m) offer for Australian real estate trust Ronin Property Group.

Chelsfield was taken private just four months ago in a £404m deal backed by the wealthy businessmen David and Simon Reuben. The brothers, who now own 35 per cent of Chelsfield, are key to any bid for the company. It is said that the pair have recently had disagreements with Mr Bernerd over his management style and are now thought to be considering whether to launch a bid of their own.

Chelsfield owns 60 per cent of the famous Wentworth golf course, which it is in the process of selling. Mr Bernerd is considering a £122m offer from Irish billionaire Sean Quinn.

However, Westfield's and Multiplex's interest in Chelsfield is down to its position as one of the UK's leading shopping centre developers. Analysts have noted that the UK shopping centre market is relatively underdeveloped compared to Australia's. However, some question why Westfield didn't bid for Chelsfield earlier this year when its value was much lower as a public company.