Private equity meets its match

Real estate entrepreneur Robert Tchenguiz has proved to be a stumbling block for private equity firms pursuing property-rich companies in the UK.

Given its recent form, The Blackstone Group is not the firm to pick a fight with. So it comes as a bit of a surprise that Robert Tchenguiz, a London-based Iranian-born private investor, has seemingly managed to outgun the biggest gun of them all.

Tchenguiz, who runs property investment firm R20 from offices in London's Mayfair district, was able to out-duel Blackstone last month in the battle for UK restaurant chain La Tasca. In the space of just a few days, he managed to turn Blackstone's offer, via its portfolio company Tragus, to dust. After Tragus' first bid was pitched at 185 pence a share, a bidding war ensued which saw both sides up their offers. Last month, Tchenguiz lobbed in a seemingly knock-out bid of 200 pence per share, valuing La Tasca at approximately £123 million ($234 million; €180 million), including debt. Tragus said it would not bid any higher, effectively putting an end to the contest.

Tchenguiz, a famed pub purchaser, reportedly wants to merge his Laurel Pub Company with La Tasca, a Spanish-themed tapas restaurant with 73 properties. Tchenguiz' move comes as pub investors look towards food-led operations to meet the changing eating and drinking patterns of Brits.

Tchenguiz, who started out investing in Grade-A offices leased to rock-solid tenants in and around London, has also been busy clouding the issue for another private equity group. CVC Capital Partners was hoping to capture Britain's biggest ever leveraged buyout by taking over British grocery chain Sainsbury's for £10 billion with half an eye on the group's property portfolio. CVC abandoned its bid as it became clear that there was opposition from founding Sainsbury family members and that pension fund trustees wanted £1 billion to plug a gaping deficit.

However, it certainly didn't help that while CVC's bid was on the skids, Tchenguiz was meeting Sainsbury board members outlining his plans for the company's real estate. The property mogul, who has amassed more than 5 percent of the company, has suggested an op co/ prop co structure to unlock the value in the grocery chain's property.

There have been reports that his suggestions didn't go down too well. However, as Tchenguiz continues to behave more like a private equity player and less like a core property investor, perhaps his activities are going down even less well among the CVCs and Blackstones of the world.

Parkes joins Nanette as non-exec director
Gerald Parkes, the European head of Lehman Brothers' private equity real estate group, has been appointed non-executive director at Nanette Real Estate Group, the Central European residential property developer listed on the Alternative Investment Market. The decision was approved at an EGM board meeting last month. Before joining Lehman Brothers, Parkes ran his own real estate investment bank, Parkes and Company before selling it to Invesco, where he headed the company's European real estate investment management business.

INREV beefs up with ING man
INREV, the association representing the non-listed real estate funds industry in Europe, has appointed Berend Scholten to the new post of director of professional standards. Scholten was previously inhouse legal counsel for ING Real Estate. He joins INREV as the body tries to increase transparency and improve corporate governance in the unlisted sector. INREV chief executive Lisette van Doorn said in a statement that reporting standards “lie at the heart of what INREV does and the creation of a new full-time position indicates how seriously we take the professionalism of the industry.”

Heitman makes London hire
US real estate investment management firm Heitman has hired Ajay Sharma from Henderson Global Investors to become a London-based senior vice president responsible for client service and marketing. Sharma will be involved in distributing all of Heitman's public securities and private equity products to investors across Europe and the Middle East. He will also oversee the company's European marketing and communications strategy. In a statement, Maury Tognarelli, president and chief executive officer of Heitman, noted that Sharma has extensive experience in developing European real estate investment vehicles.

Ernst & Young vet to join RBS
Mike McNamara is leaving Ernst & Young after 15 years to join Royal Bank of Scotland. McNamara will become a managing director with responsibility for the London real estate finance business, which funds owners, occupiers and investors looking for property solutions. The E&Y big-hitter was a partner in charge of the real estate finance team at the accounting firm and was particularly known for his advice in high-profile sale and leasebacks.

Rockspring promotes four
Rockspring Property Investment Managers has promoted a number of its employees. Stuart Reid, European director, Germany, has been made a director and will join the board immediately. Sebastian Huergo and Flavio Casero, both assistant directors, have been promoted to European directors while senior accountant Stafford Biddulph has become an assistant director. Rockspring is an independent property fund manager with €5.9 billion ($7.7 billion) of assets that was formed in 2004 as a result of a management buyout from Prudential.

3i eyes UK property services firm
3i, the listed European private equity group, is thought to be behind a £375 million (€404 million; $548 million) bid for Erinaceous Group, a UK property services company. In a statement to the London Stock Exchange, Erinaceous did not confirm the identity of its suitor, saying only that “it has received preliminary approaches which may or may not lead to an offer.” A banking source confirmed 3i was the group involved, but said negotiations were still at “an extremely early stage.” In recent months, 3i has withdrawn from the race to buy UK estate agency Foxtons, and has decided against re-bidding for Countrywide, which has accepted an improved £1 billion offer from US private equity firm Apollo.

Barrack: Carrefour could make €30bn from property
Colony Capital head Tom Barrack has reportedly said French supermarket chain Carrefour could earn around €30 billion ($40 billion) by selling off its property assets. At the same time, Carrefour chief executive officer Jose Luis Duran has said the property is worth no more than €20 billion—but that didn't stop the company's stock from hitting a five-year high in trading last month. Earlier this year, Los Angelesbased private equity real estate firm Colony acquired 9.1 percent of Carrefour, worth roughly €4 billion, alongside French billionaire Bernard Arnault.

Quinlan Private makes £1.1bn Marriott buy
A Quinlan Private-led consortium has purchased 47 Marriott hotels from Royal Bank of Scotland for about £1.1 billion (€1.6 billion; $2.2 billion). The other members of the consortium include Israeli investor Igal Ahouvi, Electra Real Estate and Delek Real Estate. RBS bought the hotels from Whitbread last April for £951 million. Last year, Ahouvi agreed to buy the portfolio from RBS and has subsequently agreed to sell 44 percent of the portfolio to Irish investor Derek Quinlan's real estate investment firm; Delek Real Estate has taken approximately 20 percent.

Tchenguiz ups Sainsbury's stake
Last month, Robert Tchenguiz increased his stake in Sainsbury's supermarket group from 4.67 percent to more than 5 percent as he called on the board to restructure its balance sheet. The property investor reportedly met with senior members of the Sainsbury's board to propose splitting the operating company from the group's underlying property holdings. Last month CVC Capital Partners, which had been pursuing a controversial £10 billion (€14.7 billion; $19.8 billion) bid for the company, formally withdrew its offer.

Russians to sell off $1bn logistics portfolio
Multinational Logistics Partnership, a real estate company backed by two Russian oligarchs, is selling a $1 billion (€770 million) portfolio of Russian logistics properties in the country's largest-ever real estate deal. Several private equity real estate firms are said to be looking at the package, which includes the 2.1 million-square-foot MLP Leningradsky Terminal project and the 1 million-square-foot Podolsk Terminal in Moscow.