Property group Peel goes private in £1.3bn buy-out

Saeed Shah
Thursday 01 July 2004 00:00
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Peel Holdings, the owner of the Trafford shopping centre in Manchester and the biggest company listed on the AIM market, plans to go private.

Peel Holdings, the owner of the Trafford shopping centre in Manchester and the biggest company listed on the AIM market, plans to go private.

Share buybacks and the company's transactions have already reduced the free floating shares to just 6.6 per cent of its issued share capital. The rest is owned by John Whittaker, the chairman, and Olayan Group, a financial and commercial business of Middle Eastern origin.

These two dominant shareholders are behind the buyback proposal, which was independently recommended to minority investors as "fair and reasonable" by Rothschild, the financial adviser.

Mr Whittaker said: "The majority shareholders wish to be free to develop Peel in a more flexible way that is commensurate with the prospects and risk profile of the Peel Group. This may involve taking decisions that might be unattractive to remaining minority shareholders."

The company believes that its newer activities outside traditional commercial property, such as developing regional airports and ports, are riskier. Peel Ports encompasses the ports of Clydeport and the Manchester Ship Canal, while airports include Liverpool John Lennon Airport, plus airports at Teesside and Doncaster.

Peel's Trafford Centre is one of the biggest shopping centres in the UK, with over 1 million sq ft of accommodation. It was worth £1.3bn in the valuation produced yesterday. The offer, at 1,240p, came at a 37 per cent premium to the closing share price of Peel on Tuesday. The value of the offer, described by the company as "generously priced" is also 3 per cent higher than its adjusted net asset value - taking into account the tax payable if Peel's estate was sold off. The basic NAV at 1,845p is considerably higher than the offer price. Mr Whittaker said: "The majority shareholders want to provide minority shareholders, who are faced with the limited liquidity of Peel shares, with an opportunity to realise their investments in Peel at a favourable time in the property cycle."

Peel listed on the stock exchange in 1983 before transferring to the junior AIM market in 2000.

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