Bidders emerge for Green Property

Two consortia are preparing bids for Irish-based Green Property, in the latest example of private equity firms pursuing undervalued property companies.

Green Property, the Irish property company that last month became the subject of a proposed management buyout, is being targetted by a number of private equity firms who are expected to make rival offers for the firm later this week.

The property group confirmed last week that it was in talks with a number of parties regarding a possible bid for the company. In addition to the MBO proposal expected from current chief executive Stephen Vernon, rival bids are expected from Lehman Brothers and Goldman Sachs.

Lehman’s bid will be made in conjunction with Treasury Holdings, the private Irish property firm, whilst Goldman Sachs, through its Whitehall Street Real Estate fund, is to team up with Deutsche Bank Real Estate Private Equity. Stephen Vernon is being advised by Merrill Lynch and is backed by two private equity houses.

The offer comes 18 months after a consortium comprising Deutsche Bank and Treasury Holdings failed in their attempt to acquire Green Property. At the time Deutsche and Treasury offered terms that valued the business at E773m.

Green Property shares are currently trading at E9.18, giving the firm a market capitalisation of E946m. The current share price is just short of the E9.23 high achieved on 21 May 2002, although both are some way below the firm’s net asset value which gives the firm a value of E11.62 per share.

The interest in Green Property follows last month’s announcement that Morgan Stanley’s $500m real estate investment fund MSREF IV was to acquire UK-listed real estate firm Saville Gordon Estates in a £500m transaction. The 121.3p per share offer made by Morgan Stanley newco Chambercroft was 2 per cent above the firm’s net asset value but over 30 per cent above the firm’s share price prior to the announcement of the offer.