Stage comeback

In early November, it was curtains for European venture capitalist Bridgepoint in the West End of London. An agreement to sell its 50 percent interest in Really Useful Theatres (RUT) to its joint venture partner, the entertainment mogul Lord Andrew Lloyd-Webber, for an undisclosed sum marked the end of the firm's stint as a proprietor of brand name theatres in the UK.

The deal leaves Lloyd-Webber as the sole owner of a portfolio of famed London establishments including the London Palladium, Theatre Royal, the Drury Lane theatre, Adelphi Theatre and the Gielgud Theatre. Tickets Ltd, a concert and festival ticketing distributor, is also part of the operation.

In deciding to buy the part of RUT that he did not already own, the composer had dramatically changed his mind from a stance taken earlier this year, when he announced that he was going to sell his entire holding in the business. Then Bridgepoint moved to dispose of its stake and, according to a source close to the deal, it was only half way through the competitive sales process when the maestro pitched in with an offer that his venture capital partner ultimately found compelling.

Having thus rediscovered his passion for theatre as a business, Lloyd-Webber appeared pleased with himself. “I am delighted that whatever happens, the theatres are going to be secure. I never really wanted to sell,” he was quoted as saying in the British press. The creator of blockbuster musicals including “Cats,” “Starlight Express” and “Evita” has pledged £10 million out of his own pocket to refurbish the properties.

Bridgepoint and Lloyd-Webber had jointly acquired the portfolio in 2000 for £87.5 million. Thereafter, according to a spokesperson, the private equity firm's effort to add value to the business focused mainly on the ticketing side. In 2002, Bridgepoint funded two add-on purchases to RUT's existing ticketing operations, acquiring The Way Ahead from Telewest, as well as the ticketing platform of Wembley.

Bridgepoint is not likely to return to the stage any time soon, partly because there are not many theatre portfolios of RUT's caliber around. “These assets were fairly unique,” said the firm's spokesman. From now on, expect to see its dealmakers in the stalls rather than the manager's office.

DEALS

Last three for Hilton auction
Royal Bank of Scotland (RBS) is leading the race to acquire 18 hotels in the UK and Ireland from Hilton Group worth an estimated £400 million (€588 million; $687 million), according to UK press reports. The shortlist for the final round of the auction is also understood to include Citigroup and Host Marriott, the American property firm spun off from the hotel operator Marriot international twelve years ago. A consortium consisting of Lehman Brothers and Goldman Sachs' Whitehall property fund was considering a bid earlier in the process, but has withdrawn its interest. Hilton is planning to sell the portfolio through a sale-and-manage-back deal, under which they would continue to operate the hotels.

MSREF acquires Dutch development company

Morgan Stanley's fifth real estate fund is paying €479 million ($560 million) to acquire AM Development BV, the commercial property arm of Dutch developer AM NV. The company owns more than 29 million square feet of property in 14 European countries and is working on developments including the Victoria Square shopping center in Belfast and New Summer Row in Wolverhampton. The deal is part of an asset disposition worth a combined €1.4 billion. In the other part of the deal, Dutch construction company Koninklijke BAM Groep NV is acquiring AV's residential development arm in a deal valued at approximately €952 million.

Apollo picks up Lyon airport portfolio
Private equity real estate firm Apollo Real Estate Advisors is teaming up with a French property company to acquire a portfolio of undisclosed value near Lyon International Airport. Apollo's European Real Estate Fund II has formed a joint venture with local real estate company Longbowto acquire a portfolio of eight industrial and office properties, including two logistics parks at the airport itself and six properties at the nearby Satolas Green Business Park. The portfolio comprises 53,000 square meters, but there is an option to acquire a further 330,000 square meters at a later date.

Carlyle enters Spain
The Carlyle Group has made its first real estate acquisition in Spain by purchasing Gran Via 68, a mixed-use building in the commercial center of Madrid. The 14-story, 7,600 square meter building has three retail floors and eleven residential floors, which are currently empty. Carlyle intends to turn them into luxury apartments. The Carlyle Group recently closed its second dedicated European real estate fund on €760 million ($930 million), 10 percent of which will be dedicated to investments in the Spanish market.

ING floats Abbey trust
ING Real Estate, the firm that successfully bid for the £1.2 billion (€1.8 billion; $2.1 billion) Abbey portfolio of UK commercial property, has floated an investment company containing part of the portfolio on the London Stock Exchange. The ING UK Real Estate Income Trust, which went public on November 7, was valued at approximately £317 million at press time. The trust now plans to spend £490.6 million acquiring 50 of the highest yielding properties from the Abbey portfolio, and is targeting an annualized dividend yield of 6.25 percent.

Cerberus in German union deal
Cerberus Capital Management has made a further acquisition in the German real estate market. The New York private equity and hedge fund manager has acquired Baubecon, the real estate arm of trade union group BGAG, according to German press reports. Although no price was given, sources close to the transaction have put the value of the deal at around €1 billion ($1.2 billion). Baubecon owns 20,000 apartments, and manages a further 30,000.