Rebel investor threatens to derail Phoenix bid for Chesterton

A Manchester-based investment house yesterday claimed it was close to frustrating a bid to buy up the whole of Chesterton, the upmarket estate agent.

Manchester & Metropolitan Investment (M&M) announced it has an 8.8 per cent interest in Chesterton, which earlier this year accepted an offer from Phoenix Acquisitions and has already had its shares de-listed. However, to compulsorily buy up minorities, Phoenix, which is backed by Jonathan Rowland's investment vehicle Resurge, needs to own 90 per cent of Chesterton.

Phoenix has got near to that target, having on 30 July claimed 86 per cent. Yesterday it said its offer will close on 29 August, leaving little time and few remaining shares for M&M to play for.

M&M has offered Chesterton shareholders 13.2p-a-share, an improvement on the recommended 12p-a-share or £12m bid from Phoenix, made in April.

Mark Sheppard, the owner of the private M&M, said he was not trying to put forward a rival bid. He said he was acting because the Phoenix deal under-valued Chesterton.

"This [Chesterton] is a business turning over more than £100m and they're offering £12m. It's got a fantastic brand and they [Phoenix] made their bid at the bottom of the market," said Mr Sheppard.

"You do not have to accept the [Phoenix] offer. Either accept our offer or stay in there... We're taking the view that it can't get any worse [at Chesterton]. Either they will buy us out or the shares will be [eventually] re-listed."

He admitted that M&M was taking "quite a big risk", as it was buying Chesterton shares at 13.2p and would be forced to accept 12p a share if it fails to get 10 per cent of the company's stock. A spokesman for Phoenix pointed out that M&M and any other dissenters would end up as minorities in a private company but declined to comment further.

Resurge owns 25 per cent of Phoenix and has provided the money for the bid, which is being fronted by Mohammad Jafari-Fini, an Iranian businessman who has been active in the UK real estate market since the 1980s.

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