DTZ picks UGL as preferred bidder
After announcing yesterday that bid approaches had indicated “minimal value” in its equity – an announcement that sent its share price plummeting – DTZ has today informed the market that its preferred bidder is UGL, the Australian property services group.
UGL now has until 6 December to make a formal offer for DTZ. The Australian group confirmed that it had been talking to DTZ regarding a possible bid, but cautioned that there was no certainty that a firm offer would be made.
Back in July the Telegraph reported on UGL’s interest in DTZ, as pressure grew on French company SGP to make an offer for the remainder of DTZ that it did not already own, after an initial approach in May. But SGP, which holds a 55% stake in DTZ, decided eventually in October not to bid. Global economic uncertainty and worries about French banks’ exposure to Greek debt were thought to have scuppered the SGP proposal, which was understood to have involved a subsequent merger with BNP Paribas Real Estate.
The Times said last month that SGL and DTZ had held talks about a bid at around 60p per share, valuing the group at £200m, but yesterday’s share price collapse to just 3.5p reflects the fact that bid talks now attribute no value to the shares. Property Week notes that DTZ has debt of £106m, £28m of which matures in 2012, and £42m of cash.
DTZ said in today’s announcement to the London Stock Exchange that a combination with UGL “could create one of the world’s largest real estate management services operations”, with 24,000 permanent employees, 225 offices and operations in 45 countries. UGL, which is listed in Australia, has a current market capitalisation of A$2.1bn (£1.4bn). A combined group would have pro forma 2011 revenue of £1.2bn, the third largest in the global property services industry.
