A combination of the companies’ property businesses would create the world’s third-largest real-estate services firm, with pro-forma revenue of 1.2 billion pounds ($1.9 billion) a year, DTZ said today in a statement. The London-based broker would become a unit of UGL’s holding company if the deal goes through.
UGL had been “attracted to DTZ for a number of years,” DTZ Chief Executive Officer John Forrester in an interview. The Sydney-based company renewed its interest after Saint George Participations SAS, owner of 54 percent of DTZ’s shares, considered buying the rest, the CEO said.
SGP, backed by the property brokerage arm of Paris-based BNP Paribas (BNP) SA, said on Oct. 17 that it wouldn’t pursue a bid. DTZ put itself up for sale two days later.
DTZ rose 11 percent to 3.17 pence, giving the company a market value of 8.73 million pounds. The shares fell 87 percent in London yesterday after DTZ said indicative bids for the company put a “minimal” value on the shares. The company today said that given DTZ’s debt level, the UGL proposal means that the shares have little, if any, value.
JPMorgan Asset Management sold about 12.5 million shares yesterday, or 4.5 percent of the company, at 2 pence a share, the JPMorgan Chase & Co. affiliate said today. Schroders Plc also sold its 1.47 percent stake.
The amount of the offer hasn’t yet been decided, Forrester said, declining to say whether it was high enough to cover the company’s debt.
UGL has a market value of $A2.1 billion ($2.2 billion). If it buys DTZ, the combined property business will have 24,000 employees and operate in 45 countries.