Merry Hill centre sold for 128m pounds

MERRY HILL, the West Midlands shopping centre where an aborted sale contributed to the collapse of Mountleigh Group, has been bought by Chelsfield, the property company run by Elliott Bernerd.

Chelsfield is paying over pounds 128m for the Dudley shopping centre, which is one of the largest in Europe. That is pounds 3m more than Mountleigh had hoped to receive from Hammerson and the O'Connor group, a US investment company. The collapse of that deal, because of concerns about a contaminated land register, sent Mountleigh into receivership.

The receivers, Stephen James and Tim Hayward of Peat Marwick, instructed an independent firm of consultants to investigate. It concluded that no remedial action would be necessary. Merry Hill is next to the site of a former steelworks.

Chelsfield raised pounds 80m through a share placing last year, and is planning to come to the market either through a share placing or reverse takeover. Mr Bernerd said the attractions of Merry Hill were its 'huge throughput' - 250,000 shoppers visited it on the first day of the January sales - and its scope for enhancement.

Mr James said he was pleased with the price and added that it showed receivers could achieve better prices for assets than financially troubled companies, which are seen as distressed sellers.

About a quarter of the 83 properties owned by Mountleigh have been sold, bringing in pounds 200m, while Galerias Preciados, the Spanish department store chain, was sold to its management last autumn. Some of the remaining assets, which are still under development, may be retained by the receivers for some time.