US company makes move on Savills' stock

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The Independent Online

A US property group has doubled its stake in Savills to 20 per cent, prompting speculation that it may make a bid for the upmarket estate agency.

A US property group has doubled its stake in Savills to 20 per cent, prompting speculation that it may make a bid for the upmarket estate agency.

It is thought that Trammell Crow told Savills executives two weeks ago in a meeting in New York that it would exercise an option that would raise its stake to 20 per cent.

The US group bought a three per cent holding in the market on Monday, to add to the 10 per cent it already held. Yesterday, Savills revealed that Trammell Crow had exercised an option, that dated back to 2000, to buy a further seven per cent from the UK company. That option, struck as part of an alliance between the two property players, was due to expire on 9 May.

Both sets of shares acquired by the US company were at above the prevailing Savills share price. Trammell Crow, a US-listed real estate advisory group based in Dallas, paid Savills £36.8m for the second batch of shares.

Mark Young, an analyst at Oriel Securities, said: "UK surveying firms have been the subject of globalisation for some years, with Jones Lang Wootton, Healey & Baker, Richard Ellis, Hillier Parker, Nelson Bakewell, etc now all American owned. However, people businesses are only worth buying if the people themselves wish to be bought - we doubt the Savills culture would thrive operating as a wholly owned US subsidiary of Trammell Crow."

Mr Young also pointed out that Trammell Crow's stock market value was slightly less than Savills', which has seen its shares rise by around 600 per cent over the last two years.

Other analysts noted however that, despite that rise in Savills shares, the US stock market accorded Trammell Crow shares roughly double the rating that the London market put on Savills stock, making a paper takeover bid attractive for the Americans.

The existing partnership between Savills and Trammell Crow involves passing each other clients for business across the Atlantic. The UK company's culture is much more transaction-orientated. Trammell Crow is more focused on facilities management and corporate advisory work.

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