Macquarie mulls £1.5bn bid for Land Sec Trillium

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The Independent Online

Macquarie, the Australian bank, is eyeing up a £1.5bn-plus bid for Land Securities Trillium, the infrastructure fund and property outsourcing giant.

The bank is understood to have established a team to assess the viability of a bid. This could make Macquarie first off the blocks after Francis Salway, chief executive of Trillium's parent Land Securities, in effect put the subsidiary up for sale last month. Mr Salway said he would look at any "serious bid" for the business.

A source close to Trillium said that a successful bid would see the demerger of Trillium from Land Securities, which is in the FTSE 100, for "about 30 seconds" before it was sold. This would save on tax.

A demerger was already the plan. Mr Salway stunned rivals in November by announcing that he would spin off Trillium and break up Land Securities' £15bn property portfolio into specialist London and retail real estate investment trusts.

The move has been hampered by the deterioration in the markets, but UBS is understood to have been hired by Trillium to advise on the demerger. Land Securities hopes to complete the demerger of all three businesses within a year, with Trillium hived off early if a bidder does not appear first.

Barclays, the bank, and the Department for Work and Pensions are two of the clients that have outsourced to Trillium their property portfolios. Trillium also holds a stake in a £1.1bn public-private partnership fund.

Macquarie declined to comment on Friday.

Meanwhile, another infrastructure fund, I2, has been put up for sale at around £850m. Two of its three major owners, Barclays Private Equity and 3i, are among the potential bidders as both want to own it outright. The third owner is Société Gé*érale, the beleaguered French bank.

Despite their own interest, Barclays and 3i decided to hire NM Rothschild, the investment bank, to run an auction to bring competitive tension to the process. A source said: "Barclays and 3i are approaching this with open minds. If someone bids more than they think it's worth, they'll take it."

Other potential bidders include ING Bank and Merrill Lynch Investment Managers. Initial bids are expected next month.

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