British Land faces revolt

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The Independent Online

Institutional shareholders in British Land, the property company run by John Ritblat, are losing patience with the company's poor share performance, and some are looking for an exit.

Institutional shareholders in British Land, the property company run by John Ritblat, are losing patience with the company's poor share performance, and some are looking for an exit.

Investors are unhappy that British Land's executives have been unable to stem the decline in its share price, which has almost halved since 1998.

Closing at 405p on Friday, British Land is now trading at nearly a 40 per cent discount to the net value of its assets.

The shareholder unrest was triggered last Monday when British Land failed to buy a 29.8 per cent stake in rival property company Liberty International from shareholder Standard Bank. Instead, 97 per cent of shareholders voted to accept a counter-offer by Liberty.

One institutional shareholder in British Land, who asked not to be named, said: "I want out. But I'm not prepared to exit at the current price. The ball is now in British Land's court. Let's see what they come up with."

British Land's biggest shareholder is Schroders, holding 17 per cent, with other investors including Merrill Lynch, Jupiter and Fleming.

The source added that the £2bn bid to take quoted property company MEPC private, where shareholders will exit at a 10 per cent discount to the net asset value of the company, has whetted some shareholders' appetites. "A 10 per cent discount would be attractive at British Land," the source said. Such a deal would value British Land at around £3.1bn.

The prospect of British Land, which is the UK's third largest property company, with a market capitalisation of £2.1bn, launching an immediate hostile bid for Liberty is now slim. Analysts agree that Mr Ritblat will lie low while he works out his next move.

Mr Ritblat was unavailable for comment.

Meanwhile, Donald Gordon, the boss of Liberty International, said that he now plans to increase holdings in rival property companies as an "arbitrage opportunity" and to "promote consolidation".

He refused to reveal which companies he is targeting but would not rule out buying British Land's shares. Mr Gordon is not expected to launch a counter-bid for British Land.

"There is an enormous opportunity in the property sector because so many companies are trading on a big discount. We would like to take advantage of that," he said.

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