Three rival private equity real estate bidders are doing battle to take private British property company Minerva. Apollo, Orion Capital Managers and Delancey with AREA Property Partners have submitted bids, with a winner due to be picked shortly, according to Property Week magazine.
It was reported that a purchaser of the property company would take over Minerva by paying £200 million (€228 million; $324 million) and assuming Minerva’s £800 million debt pile. The three bidders are thought to have offered between 100 and 110 pence per share, which is a discount to the last reported net asset value of 140 pence but a small premium to the share price, which is at around 95 pence.
This is the second time Minerva has been at the centre of private equity real estate bids in two years. In October 2009, The Observer newspaper reported that Blackstone, Fortress, AREA Property Partners and Europa Capital had all put Minerva within their sights. According to analysts interviewed at the time, the company completed a £750 million refinancing of debt, which was said to be due for expiry in 2011.
Minerva had not issued a statement in response to today’s report by lunchtime, but shares in the company spiked immediately by 6 percent upon publication this morning.
Two weeks ago, the company reported in an interim financial statement that The City of London prime office market – where it has a major office development completed – was “relatively quiet” with respect to leasing activity during the first quarter of 2011.
The company drew attention to the absence of large deals of over 100,000 square feet and an uncertain global economic backdrop. The vacancy rate, which is declining it said, remained lower than the long-term average with prime rents steady at £55 a square foot and expected to grow with the continued decline in available prime office space.
The outlook for the prime London residential market remained positive, it added, with international buyers dominating. At present, prime sales values show no sign of softening, demonstrating that London retains its global status and appeal.
Minerva has been busy completing sales and pre-sales at its Lancaster Gate property totaling around £277 million, of which £140 million relates to units in phase one of the development that have now achieved practical completion. It has had some leasing success at another of its properties the mixed-use St Botolph Building, having agreed to rent out 23,000 square feet of retail accommodation representing most of the available retail space. The remaining office space is yet to be leases, however. There is still no tenant for its Walbrook Building next to Cannon Street station in the City, but the company insisted it continued to receive interest from prospective tenants.
The company first said on 14 January this year it was in preliminary talks regarding a potential offer for all or part of the company. It said: “Discussions with a number of potential bidders have since progressed and the company is currently in discussion with its lending banks regarding any potential offer. Notwithstanding the good progress that has been made, there can be no certainty that any offer for the company, in whole or in part, will be forthcoming.