pounds 100m bonus for MEPC's shareholders

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The Independent Online
MEPC, the property group, yesterday promised to return an extra pounds 100m to shareholders after completing a pounds 1bn sale of its overseas businesses.

The group will repay pounds 400m by issuing a bonus of redeemable "B" shares, using the rest of the proceeds of the sale to fund a pounds 550bn development programme in the UK. Originally, only pounds 300m had been expected.

The extra capital will reward shareholders who have in the last year put MEPC under intense pressure to sharpen the focus of its corporate strategy.

Since last September, the group has mounted a wholesale restructuring, ditching its US and Australian operations and buying UK property.

In February the group sold its Australian portfolio for A$418 (pounds 157m) - a price lower than hoped because markets were depressed by the impact of the Asian crisis. By the end of April, it had also sold its US portfolio for $1,315m (pounds 807m), considered a reasonable price.

In the same period since September, MEPC has sought to refocus on properties which will bring a higher investment return, buying pounds 685m of UK property and selling holdings worth pounds 650m.

The group said it remained optimistic about prospects for UK property prices. Occupier demand was particularly strong in the south-east office market, the company said.

James Tuckey, chief executive, said: "We have delivered on everything we said we were going to." He said gearing had been reduced to 65 per cent, allowing the company to complete developments in the UK. He expects the company to spend pounds 250m over the next year and a further pounds 300m before the end of the year 2000.

The pounds 2.3bn group has recruited a new chairman, Sir John Egan, to replace Michael Blakenham at the beginning of August. Sir John is currently chairman of BAA, the airports business.