pounds 240m bid for property group

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The Independent Online
Argent, a retail property group, yesterday unveiled a pounds 240m bid from the British Telecom pension scheme as part of plans for Peter and Michael Freeman, the group's founders, to bow out of the business.

The general offer at 375p a share in cash and loan notes became mandatory under Stock Exchange rules after the pension fund's property arm, BriTel, agreed to buy out the combined 39.5 per cent stake belonging to the Freeman brothers and their venture capital backers.

Unusually, the offer, which reflects the current net asset value, is pitched at a substantial discount to Thursday's closing market price of 450p, sending the shares sliding 77.5p to 372.5p yesterday. BriTel is understood to be keen for Argent to retain its stock market listing so it does not have to consolidate the property group's debt.

If the deal goes through, the Freemans are set to receive pounds 12m from their 5 per cent stake in Argent, on top of around pounds 2m the pair have realised since the group floated at 255p a share three years ago. The realisations compare with an initial investment of pounds 100,000 when they founded the business in 1981. The two, who are joint managing directors, will move from their current six-month rolling contracts paying an annual salary of pounds 230,000 to a fixed one-year term while successors are found.

Peter Freeman said yesterday they felt the company had outgrown them. "We would rather work on three schemes and add value at a minute level than not work on 30 schemes and have people report to us ... We want to get back to running our own company."

He said they wanted to return to putting together big developments without having to deal with an investment portfolio.

The other beneficiaries from yesterday's deal are SBC Warburg, Pincus Investors, an arm of the biggest venture capital group in the US, AF Portfolio, part of another US venture capital group, and Chasophie, a private group, all of whom have backed Argent since 1988. The other investor selling is Kleinwort Benson.

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