Bernerd emerges as Chelsfield suitor

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The Independent Online

The Independent directors of Chelsfield are expected to concede this week that the proposed £900m buyout from its founder and chairman, Elliott Bernerd, is the only bid on the table for the property company that they put up for auction two months ago.

The board's deadline for new bids for the company expired last week with no fresh offer. The independent directors will be forced to re-examine Mr Bernerd's complicated 305p-per-share proposal to acquire the group, which they dismissed as too low when it was made in October. Despite 11 expressions of interest, thought to include one from the property investment group Hammerson as well as several from venture capitalist companies, no firm bid materialised.

Mr Bernerd, who has backing from the billionaire Reuben brothers as well as HBOS and Royal Bank of Scotland, made a presentation to his board of independent directors, led by Sir Bruce MacPhail, last Thursday. He set out the terms of his deal, which will offer shareholders the option of retaining a stake in the delisted company.

Mr Bernerd, whose consortium speaks for 30 per cent of the property group, is likely to meet opposition from investors, who believe his proposal undervalues Chelsfield. Standard Life, which has a 3.3 per cent stake, said in October: "Any bid below 400p undervalues the company."

The lack of alternative offers vindicates analysts' warnings that the complexity of putting together a valuation of a company such as Chelsfield could preclude other bids being made by the deadline. The independent directors are anxious to bring the takeover process, which was sparked by an approach from Mr Bernard in the spring, to an end before Christmas.

Chelsfield's shares, which slipped a ha'penny on Friday to 315p, were trading under 200p before the approach was revealed. The "adjusted" net asset value being used by the independent directors is 299p.

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