British Land to quash talk of takover
British Land will seek to reassure shareholders that it is business as usual when it unveils results on Tuesday after shares soared late last week on talk of a multi-billion pound bid.
Playing down: British Land is expected to refute bid talk on Tuesday
Investors may also be buoyed by reports that the property giant may announce it is in exclusive talks to sell a 50% stake in its flagship £2.3bn City development at Broadgate.
Bankers who were thought ready to back a huge takeover offer denied any involvement.
Credit Suisse was said to be considering funding a £10bn bid by a consortium led by Lakshmi Mittal, the Indian steel magnate and Britain's richest man, and the Abu Dhabi ruling family. But sources close to Credit Suisse dismissed the talk as ' rubbish'.
The news had not filtered through to the stock market before Friday's close, with British Land emerging as the day's biggest FTSE 100 riser. Shares soared 19.4p to 512.5p as investors piled in ahead of a possible bid, which looked set to ignite the rest of the sector.
British Land's new chief executive Chris Grigg will seek to placate shareholders when he unveils first-quarter results.
Analysts want to know when British Land will start acquiring property assets again. The company has been cautious over acquisitions-throughout the credit crunch, with Grigg and predecessor Stephen Hester reluctant to call the bottom of the market.
Investors seeking a sign from Grigg that the market is close to its nadir are likely to be disappointed. He is only expected to say that he will kickstart a new wave of property acquisitions in the next 24 months.
An analyst said: 'The market will take time to turn round. British Land does not want to rush in and make acquisitions too early.'
This may be of little comfort to shareholders, given that analysts forecast a fall in net asset value per share from 398p in May to 365p.
Grigg will seek to persuade concerned investors that the heavily loss-making company is well positioned to emerge from the recession in more robust health.
Only 6% of British Land's tenants are due to have their lease agreements renewed in the next three years. So barring a wave of administrations among occupiers, rental income stream looks secure.
'Very low levels of its tenants are in administration,' added the analyst. 'It has strong tenants on long leases in first-class property assets. So it is in a strong defensive position.'
British Land sold a 50% stake in Sheffield's Meadowhall shopping centre for £587.7m to London & Stamford Property this year.
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