MEPC, the UK's fourth biggest commercial property investment company, is being taken private through an agreed L1.9bn ($2.85bn) cash bid from Leconport, a joint venture formed by GE Capital Real Estate and the Hermes fund management group on behalf of BT Pension Scheme.
The 550p a share offer, accepted yesterday, represents a 25 percent premium on MEPC's closing share price on May 31 and values the company at L3.49bn if debt is included.
In terms of MEPC's net asset value, 550p represents an only 3 percent discount to the 569p announced in the company's interim profits to March 31.
Sir John Egan, MEPC chairman, commenting on his board's recommendation of the bid, said: "This offer represents a good outcome of our strategic review designed to maximise shareholder value. We have concluded that it provides immediate fair and reasonable value for the company."
UK property company shares have for long been plagued by investor aversion and left to trade at substantial discounts to net asset value. MEPC shares rose as much as 22 percent to 542.5p following the announcement of the Leconport bid.
MEPC has changed its focus during the last two years, selling its overseas and smaller UK properties to focus on managing British office developments and larger retail parks.
The company separately announced a 17.5 percent increase in interim pre-tax profit to L57.7m, before disposal gains. No interim dividend is being paid in light of the Leconport offer.
Charles Alexander, GE Capital Europe president, said: "We are excited by this opportunity to increase our direct investment in UK property and in working with our new joint-venture partner and the management of MEPC to develop MEPC's assets further in a private company environment." Reuters
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