Chesterton 'wasted money on empty offices'

The upmarket estate agency Chesterton International was yesterday accused of paying huge rents on properties that have been empty for years by the two rebel directors that were sacked last week.

In a letter to shareholders urging them to hold back from approving the 12p-a-share cash offer from Phoenix Acquisitions, Neil List and Mike Backs said the company had been poorly managed. "The residential division is committed to paying rent totalling almost £100,000 a year for extra office space in Little Venice, Chiswick and Fulham that it does not occupy, whilst a prime office property in Birmingham costs about £138,000 a year in rent alone, yet had lain empty since July 1992," the letter said.

Mr List and Mr Backs joined Chesterton as chief executive and chief operating officer in February but were dismissed after opposing the Phoenix offer and making it public that another party had shown bid interest. This was against the orders of Peter Brooks, the chairman, who has recommended the Phoenix bid to the board. Shareholders have until 30 June to vote.

The board yesterday said the party, a UK quoted company, had withdrawn its interest. Mr List and Mr Backs, however, may launch their own bid. "The news that the other party has walked away does not change our view that shareholders should have been told about it and that the 12p Phoenix offer is too low," Mr List said.

A spokesman for Chesterton said vigorous attempts had been made to let the Birmingham office, but had been unsuccessful. "During last year when the residential market was very strong, we took on some additional space in London. The market has since fallen, and our expansion plans have been scaled back. The properties were never fitted out, so no significant costs were incurred," he said.