Max Property Group's purchase of a £232 million portfolio of properties has been held up because a junior lender in an orignal deal is reportedly wanting to buy the assets itself.
According to the UK property press, Citi has asked receiver Ernst & Young about exercising a pre-emption right to match the bid of London-listed Max Property.
Citi reportedly provided part of a £38.9m mezzanine loan through a joint venture called Cambridge Place-Torre Asset Foundation to Dunedin, which is the original owner of Industrious that got placed into receivership. As such, it would not receive anything back if the assets were to be sold to another party.
Yesterday, Max Property Group, which is backed by US alternatives firm, Och-Ziff Capital Management, said in a London Stock Exchange announcement that it did not yet satisfy the conditions of the sale. Max added it was seeking clarification from the receiver, Ernst & Young.
The saga is demonstrating the complexities surrounding buying assets in some form of distress.
Earlier this month, it announced it had exchanged contracts to buy the collection of UK assets, and that completion was expected by 7 October following the “fulfillment of certain conditions relating to the receivership”.
Max raised £211 million ($351 million; €252 million) in an IPO in May.
The acquisition of the Industrial portfolio was being financed with cash and £128.3 million in non-recourse, five-year debt facility arranged by Eurohypo.