UK Estates bid goes to the wire

The hostile battle for control of UK Estates went to the wire last night as Ashquay, which is bidding pounds 21m for the Manchester-based property development group, sought to buy shares in the market to secure outright victory.

In a statement issued to the Stock Exchange last night after the final closing date for its offer had closed, Ashquay said that with the Takeover Panel's approval, it would announce the level of acceptances by midnight.

But the outcome looked too close to call after shares in UK Estates closed 0.75p higher at 28.5p, while Ashquay ended 0.5p better at 40p, valuing the bid at 30.8p. Ashquay is offering 10 shares for every 13 ordinary UK Estates shares.

Just minutes before the offer closed Ashquay said it would borrow up to pounds 750,000 "on normal commercial terms" to acquire shares in UK Estates. The money will be borrowed from Close Brothers, a subsidiary of Close Brothers Finance, who are acting as financial advisers to Ashquay.

Ashquay is thought to have used the money to go into the market and buy a 3 per cent stake held in UK Estates by the Co-Op Bank. Sources familiar with the bid said uncertainty about whether Ashquay would be able to secure registration of the Co-Op shares with the Takeover Panel had caused a delay in the outcome of the bid being announced.

Ashquay has already won over investors speaking for 38 per cent of UK Estates' ordinary shares and 16 per cent of its preference shares.

During the often acrimonious bid battle Ashquay sought to increase the pressure on UK Estates by sticking to yesterday's deadline as the final closing date for its offer. The Takeover Code had allowed for Ashquay to extend its offer until 27 January.

At one stage, Ashquay accused UK Estates' directors of having a "thorough disregard for shareholders' interests and of "mismanaging the company". It also highlighted UK Estates' administrative costs, which last year totalled pounds 970,000, and the pounds 530,000 UK Estates spent on shares for an employee benefit trust.

Last year pre-tax profits at UK Estates fell from pounds 610,000 to pounds 382,000.

But UK Estates rejected the offer, noting Ashquay is a smaller company with net assets less than half those of UK Estates. It also derided the lack of a cash alternative.