Bernerd struggling to put together Chelsfield buyout

Elliot Bernerd, chairman of Chelsfield, the property group, is still trying to put together a bid for the company, he admitted yesterday, as a deadline of mid-October was set to pull off the deal.

The company reported a drop in the valuation of its estate yesterday and disappointed the City when it failed to come up with firm news on any of the three deals it is working on.

Mr Bernerd still has not managed to finalise a management buyout proposal, after the company revealed in May that it had received an approach led by him.

"We have worked hard over the summer to try and put all necessary arrangements in place. I believe we are in sight of the finishing line ... [but] I cannot say with any certainty whether or not the consortium which we have assembled will be in a position to make an offer which the independent directors decide merits being put to shareholders," said Mr Bernerd.

Investors were also waiting for news on the company's plans to bring in outside investors to its Global Switch "internet hotels" venture and a partner for its giant White City development in West London. The company said it has no final agreement on either project.

Mr Bernerd said his consortium would try to submit a bid to the company's independent directors by the middle of October.

"It is obviously important to the business as well as the shareholders that the uncertainty is removed quickly. Given that there are only certain specific issues, it ought now to be possible to address those, successfully or not, within a limited time frame," he said.

Chelsfield shares closed down 6.5p at 306.5p. Analysts warned that any bid would come in even lower. Nan Rogers, of Bridgewell Securities, said she expected an offer of no more than 300p a share or £847m. She said at that level, it may well be rejected by independent directors, as it takes "no account of the tremendous gains" that are available to the company through its upcoming developments.

Mr Bernerd said he wanted to take the company private because the stock market was not willing to "place proper value" on large property companies.

The company announced that net asset value had fallen from 376.7p to 351.1p per share, between June 2002 and June this year. Chelsfield unveiled interim results yesterday, which highlighted a £300,000 pre-tax profit for the six months to June.

There was a loss of £16m at Global Switch, the value of which was written down by £18.8m. But analysts warned that the value of Global Switch, now in the books at £409m, could only be supported if Chelsfield managed to pull off a deal to bring in Morley Fund Management as an investor - talks were flagged up in March.

Chelsfield has agreed a deal that will see investment group CGI invest £250m in its White City retail and leisure scheme, but Mr Bernerd said yesterday that this funding arrangement was not expected to become unconditional until November.