Duke Street and Europa in unusual property tie-up(3)

The pair have forged an unusual private equity, property firm partnership to buy a listed Channel Islands group that controls five separate consumer and leisure businesses.

Duke Street Capital, a European buyout firm, and Europa Capital, a property investment firm, have completed the acquisition of CI Traders, the largest operator of consumer and leisure businesses in the Channel Islands.

Shares in the company are suspended from today and will be cancelled tomorrow after more than 94 percent of shareholders backed the buyout on 30 July. The vote follows an offer for the company of 100 pence a share on 27 June.

The buyout is unusual because it is a rare example of a pure private equity firm teaming up with a real estate investment manager to take over a company.

Jersey-based CI Traders has an enterprise value of £410 million and is the result of a merger between two of the Channel Islands’ biggest companies, Ann Street Group and Le Riche. It operates more than 46 food and beverage stores and fuel forecourts under various brands. The retail division also has a franchise to run Marks & Spencer stores and a batch of Safeway stores acquired from Bradford-based WM Morrison in April 2005.

In addition to the retail arm, the company operates a consumer finance, hospitality and manufacturing and distribution business. Of particular interest to Europa, though, is a separate property business, CIT Estates, which is responsible for managing and growing the company’s operational real estate portfolio, and ComProp, which owns £100m of non-core commercial property investments.

As part of the agreement, properties are being sold to CI Traders chairman Thomas Scott. Some of the properties are being leased back by the operating company.