CLS shares jump on £40m Citadel takeover

CLS HOLDINGS, the commercial property company, yesterday offered to buy the portion of Citadel Holdings it does not already own in an agreed takeover that values the French property specialist at £40m.

CLS HOLDINGS, the commercial property company, yesterday offered to buy the portion of Citadel Holdings it does not already own in an agreed takeover that values the French property specialist at £40m.

Shares in CLS jumped 21.5p to 199p after it unveiled the deal, in which it is offering three new shares for every five Citadel shares. Citadel shares closed up 6p at 117.5p, below the 119.4p offer price. Analysts said the deal was a reaction to the depressed share prices in the property sector, that have seen shares trading at increasing discounts to net asset values (NAVs). Small property companies, like Citadel, have two possibilities to reduce the discount: either to grow bigger or to go private.

"The company might have gone private if the investors were not happy with the performance of the company. The merger solution can be regarded as a compliment for the management team," one analyst concluded. CLS yesterday said it had acceptances from up to 46.8 per cent of Citadel's shareholders. It already holds 17.4 per cent of Citadel and also has warrants that could increase its interest in Citadel to more than 31 per cent.