Minerva admits to bid approach, boosting shares by 32 per cent

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The Independent Online

Minerva, the group behind plans to build London's tallest skyscraper, confirmed yesterday that it had received a takeover approach, raising hopes of a bid battle that could lead to an offer as high as £600m.

Minerva, the group behind plans to build London's tallest skyscraper, confirmed yesterday that it had received a takeover approach, raising hopes of a bid battle that could lead to an offer as high as £600m.

Shares in the group soared nearly 32 per cent, valuing it at £520m, after the board said that it had "received an approach from a third party". It is understood, however, that a number of parties have expressed an interest in Minerva, which owns the Criterion building in London's Piccadilly Circus.

Any takeover bid for Minerva is also set to spark a separate auction for Allders, the department store chain. Minerva owns 60 per cent of Allders through an investment vehicle Scarlett Retail, which bought the chain for £160m last year. House of Fraser has tried to buy Allders in the past, leading to speculation yesterday that it may return to the bidding.

Rhys Williams, an analyst at Seymour Pierce, believes that House of Fraser may not want to bid for Allders, but Baugur and Tom Hunter, who own a significant chunk of House of Fraser, may put pressure on the board to look again. Mr Williams said: "They both remain hungry to complete deals and we estimate that over £200m in central overhead savings can be made from putting Allders and House of Fraser together."

Shares in Minerva closed yesterday at 323.5p. Until yesterday, it has consistently traded at a discount to the value of its net assets per share, which stood at 312.7p in December. Analysts believe this could now be nearer 350p, giving Minerva a value of £560m.

The board confirmed that none of the group's executive directors or their family interests were behind the approach. It is thought that Andrew Rosenfeld and Sir David Garrard, chief executive and chairman of Minerva respectively, are keen to sell their stakes. They own 25 per cent each, and would pocket large windfalls from the sale.

Potential bidders are rumoured to include Hammerson, Land Securities, British Land and Liberty International. Some cynics in the City believe that talk of a full-blown auction for the company may be overheated. "It could also be that Minerva needs more capital to complete existing developments. I doubt if there is more than one serious bidder, and that means that shareholders will not necessarily be getting the best value," one analyst said.

City office rents have been falling for the past three years, but estate agents are now seeing rents increase as economic growth strengthens. A number of property companies have been subjected to takeover approaches. Morgan Stanley recently won a lengthy battle for Canary Wharf with a £1.7bn bid. Derwent Valley Holdings recently rejected a bid from one of its shareholders.

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