Slough threatens to end Bredero listing: John Ritblat's motives remain a mystery as wrangle with British Land intensifies

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The Independent Online
A BIZARRE wrangle between two of Britain's largest property companies intensified yesterday when Slough Estates threatened to delist the shares of its associate Bredero Properties.

Slough's unusual announcement was prompted by an unexpected intervention by John Ritblat's British Land, which last week bought a 7 per cent stake in Bredero for pounds 270,000.

The acquisition, which puzzled analysts, in effect scuppered a bid launched by Slough last month to buy in the 51 per cent of Bredero it did not already own.

If Slough goes ahead with its threat, more than 40 per cent of Bredero's shareholders, including British Land, could be left without a market for their shares.

John Ritblat denied the acquisition represented an opening gambit in a bid for Slough but refused to say why he had bought the shares.

In order to compulsorily acquire all the shares, Slough needs to gain 90 per cent of the equity it has bid for. British Land's intervention rules out that possibility.

Announcing acceptances on behalf of 6.76 per cent of Bredero's shares by yesterday's first closing date, Sir Nigel Mobbs, Slough chairman, said the bid could now be declared unconditional at any time. Slough would then apply to the Stock Exchange to remove Bredero's listing, in effect trapping minority shareholders.

A spokesman for the Stock Exchange said yesterday that Slough would be acting within its rights once it had acquired control of Bredero.

The motivation for John Ritblat's interest in Bredero remains a mystery. An ambitious retail developer in the late 1980s, Bredero was brought to the brink of collapse by an office development at Hammersmith in west London.

The project was completed just as demand for offices and rents slumped, and led to a pounds 77m write- off in 1992.

That pushed the company into a pounds 106m loss and left Bredero with negative net assets of pounds 24m.

In return for a refinancing of its debts Bredero was forced to liquidate almost all its portfolio. Disposals of stakes in shopping centres in England and Scotland left the company with a clean balance sheet but next to no assets.

Slough, which bought into Bredero in 1986, made a loss of pounds 40m on its investment.

It had hoped to integrate Bredero's two remaining development sites, in London and Glasgow, into its own operations but could face difficulties in doing so if British Land remains on the share register, forcing Slough to maintain Bredero as a separate company.

Slough's offer of 10p a share compared with a negative net worth of 9p at Bredero. British Land paid Scottish Amicable 11p a share for its stake.

The shares, which had jumped from 10.5p to 13.5p on hopes that British Land would be able to flush out a better deal, closed yesterday 0.5p lower at 11p.