Investors call on Greycoat to break itself up

Rebel investors Brian Myerson and Julian Treger yesterday called for the break-up of Greycoat, the property group, saying the management had no clear strategy to deliver value for shareholders.

The two investors, whose UK Active Value Fund holds an 11 per cent stake in Greycoat, have requisitioned an emergency general meeting to discuss its proposal to sell Greycoat's entire pounds 500m portfolio. This must be called within 49 days.

"The management has failed to deliver. We'd rather have our money back," Mr Myerson said.

Greycoat's managing director, Peter Thornton, described the move as "an unwelcome and costly distraction".

He said such a sale would be premature as the commercial property market in London was not predicted to peak until 1998.

"The timing is awful. It's completely the wrong time to do it," Mr Thornton said.

Greycoat shares rose 5.5p to 148.5p.

Greycoat is one of a string of companies targeted by the UK Active Value Fund, which specialises in buying stakes in underperforming companies. It has also led shareholder pressure groups in Signet, the jeweller, and Scholl, the footwear group.

Last week the fund called for Hogg Robinson to break itself up and buy back half the shares.

UK Active Value acquired its stake in Greycoat during a re-financing of the company in 1993 when it was on the brink of collapse.

Mr Myerson has had an uneasy relationship with the company since then and resigned from the board in March in protest against the company's strategy to return to speculative development.

Mr Myerson criticised Greycoat's performance, saying the company's shares stood at a 23 per cent discount to its forecast net asset value of around pounds 185m.

He denied he was calling for a firesale, saying the portfolio could be disposed of over an 18-month period.

He also denied that the apparent willingness of UK Active Value to sell its stake had cast a pall over the share price. The fund claims it has never sold a single share in the company.

Both sides claimed to have the support of institutional shareholders.

One fund manager described Mr Myerson's action as premature, given the forecasts for the London property market.

"The market is improving and I'm not convinced that liquidising the portfolio is the best way to realise the value," he said.

Investment column, page 20