Lone Star Raises Quintain Offer After Pressure From Elliott

  • Private-equity group increases bid by 10 pence a share
  • Elliott had said first Lone Star bid undervalued the developer

Lone Star Funds raised its offer for London-based housing developer and property investor Quintain Estates & Development Plc after hedge fund Elliott Associates LP pushed for a higher price. Quintain’s shares soared.

The new bid of 141 pence a share values the company at about 745 million pounds ($1.13 billion), Lone Star said in a stock exchange statement on Friday. The price is 10 pence a share more than a bid made in July and is a final offer, the private equity group said. Quintain’s shares rose 6.8 percent to 140.5 pence at 08:29 a.m. in London trading.

The average home value in London rose 8.3 percent in the year through July to 488,782 pounds amid a lack of construction and a rising population. Quintain has approval to build 5,000 new homes near England’s national soccer stadium at Wembley and Lone Star plans to accelerate the construction at the project after its bid is accepted.

Lone Star’s offer for Quintain “substantially undervalues the company,” Elliott, which had built up a 14 percent stake in the company through derivatives, said by e-mail yesterday. Lone Star’s offer had received 71.7 percent acceptance from the developer’s shareholders prior to the increased offer on Friday. The bidder had set a threshold of 75 percent acceptances and a deadline of Sept. 30.

The new bid is a premium of about 32 percent to Quintain’s share price on July 28, the day before Lone Star’s initial offer was announced.

For related news and information:
Lone Star Bets on London Homes in $1.1 Billion Quintain Bid
London’s Wembley to Get 10,000 Homes as Part of Regeneration
Croydon Beats Chelsea as London Investors Chase Rental Returns
Croydon Beats Chelsea as London Investors Chase Rental Returns

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