Property company in 30m pounds pounds placing

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The Independent Online
DEVELOPMENT Securities yesterday announced a pounds 30m placing and open offer and pounds 44m of acquisitions, two weeks after the rejuvenated property company was forced to shelve the deals because of a rumoured insider dealing investigation by the Department of Trade and Industry, writes Tom Stevenson.

The delay forced it to issue substantially more shares to raise the money because of a fall in the share price from 40p to 33.5p.

At the issue price of 32.5p, 93.7 million shares were issued on the basis of four for every five already owned. It is understood that the proposed price two weeks ago was 38p, which would have required the issue of only 79 million shares.

The proceeds will contribute to the acquisition of a portfolio of 85 retail properties in the North-west and Scotland, and of Grafton Group, a privately owned company with 10 properties. The retail portfolio was valued at pounds 25.8m and has a pounds 2.2m rent roll. Grafton's properties, which generate pounds 2.5m of income, are thought to be worth pounds 28.3m. Grafton also has borrowings of pounds 11.5m.

The placing is the second cash-raising exercise since Martin Landau, the property entrepreneur, joined the board of Clayform in June and changed the company's name.

The company is thought to be subject to an investigation by the DTI into share dealings in the days before the announcement of Mr Landau's appointment, although the department has not confirmed this.