UK Estates criticised as offer deadline looms

The hostile, pounds 21m takeover for Manchester-based UK Estates took another acrimonious turn yesterday when rival property group Ashquay accused its directors of having a "thorough disregard for shareholders' interests" and of "mismanaging the company".

Ashquay also sought to increase the pressure on UK Estates by sticking to the 13 January deadline as the final closing date for its offer. The Takeover Code allows for Ashquay to extend its offer until 27 January.

The outcome could be close even though Ashquay has already won over investors representing almost 38 per cent of UK Estates' ordinary shares and 16 per cent of its preference shares.

"We believe UK Estates shareholders have a simple choice," said Derek Tughan, Ashquay's chairman.

"Prior to the announcement of the offers, UK Estates' ordinary shares had a value of just 22.5p; under the ordinary offer they are presently valued at 29.6p."

Shares in UK Estates closed unchanged at 27p, while those in Ashquay stayed at 38.5p.

Ashquay also repeated its charge that the target firm's management had rewarded itself despite "failing to enhance the value of the company's shares".

In particular, Ashquay has highlighted UK Estates' administrative costs, which last year totalled pounds 970,000, and the pounds 530,000 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.

Ashquay promised that the combined group would be prudently financed, with pro forma gearing lower than that for UK Estates.

Ashquay has offered 10 shares for every 13 ordinary UK Estates shares.

UK Estates has rejected the offer, noting Ashquay is a smaller company with net assets less than half those of UK Estates.

It has also queried Ashquay's reasons for shortening the bid deadline, suggesting Ashquay might be unable to meet the costs of underwriting a rights issue to fund the takeover.