British Land becomes bid target

British Land has seen its shares leap as rumours swirl of a bid approach by a group of foreign investors. A consortium, thought to include Indian metals magnate Lakshmi Mittal and the ruling family in Abu Dhabi, is reported to be in talks with broker Credit Suisse with a view to a £10bn-plus offer for the group. Other sovereign funds and Chinese investors are also cited as possible buyers. Shares in the group were up 2.5 per cent yesterday and this morning jumped over five per cent in early trading.

British Land has been on a drive to reduce its debt since new chief executive Chris Grigg took over in January. He has overseen a fall in the company’s debt from £5bn to £3.24bn so far, with the help of a £740 rights issue in March, and has tried to offload Broadgate Circle, its City flagship, in a further effort to lower its borrowings. It is thought that the buyers were initially looking at the Broadgate development but then turned their sights on British Land in its entirety.

The property giant makes up part of the FTSE 100 index and is one of the country’s biggest landlords. The company, already 4.9 per cent-owned by the Government of Singapore, has not yet made its position clear, but as the rumours gain ground it will be under pressure to make a comment. Analysts believe a bid at this point could spark renewed interest in the depressed commercial property sector and might also have a knock-on effect in the housing market.

WHAT THEY ARE SAYING:Damian Reece in the Daily Telegraph: "The whole property sector is likely to light up stock market screens this morning as the bid alert goes general. Despite some improvement since March in both share prices and asset values, property is still cheap by any historical standard, so you can expect some very determined bidders to emerge over the next few months." ·