Greycoat mbo team bids pounds 283m

A GREYCOAT management buyout team, backed by Mercury Asset Management Group yesterday offered to pay cash for all Greycoat shares, valuing the London office property company at pounds 282.5m and trumping a bid from George Soros's Delancey Estates.

The London-based fund-management business owned by Merrill Lynch teamed up with Greycoat executive directors to offer 260p-a-share, 6 per cent higher than Delancey's bid of cash and shares worth 245.3p. It is also 5 per cent higher than yesterday's closing price for Greycoat.

Shareholders owning about half of Greycoat's shares have approved the bid, some promising to accept it unless there is a cash offer of 280p a share or more, said Robert Leitao, a director at NM Rothschild, which advised Greycoat.

He said he did not think that Delancey's managing director James Ritblat, the son of British Land's John Ritbat, could "come up with 280p in cash - and without that he's wasting his time".

Greycoat, whose shares rose 3.8 per cent to a seven-year high of 257p, has holdings concentrated in central London, where office values have risen in the past three years because of the area's growing dominance as a European financial centre.

Mercury and Greycoat between them own two-thirds of Tower 42, the former NatWest Tower, which is the tallest building in London's main financial district.

Delancey, which is two-thirds owned by Soros's Quantum Realty Fund, last week raised its hostile bid for Greycoat by 25 per cent to pounds 263m, and sweetened it by adding cash. Royal Bank of Scotland that day bought a 5 per cent stake in Delancey.

Mr Leitao said several companies bid for Greycoat, which put itself up for sale after Delancey launched its bid, and none was as high as 260p per share.

Mercury, which now holds about 2 per cent of Greycoat, will make the investment through its Mercury Private Equity venture capital division and Mercury Property Fund.

As of 31 March, Greycoat's net asset value was 283p per share.