Lone Star raises offer for United Kingdom property firm Quintain

Private-equity firm Lone Star Funds has bowed to pressure from an activist hedge fund and hiked the price it is paying for Quintain Estates & Development PLC, which plans to develop an 85-acre site around London’s Wembley Stadium.

Lone Star’s revised offer comes a day after The Times reported that activist shareholder Elliott Capital Advisers had taken control of a 12.9 percent holding in Quintain and felt the original offer undervalued the company.

Following the increased offer, which priced shares at 141p, Lone Star bought an additional 4.3 per cent of Quintain’s shareholding, pushing the buyout house over the 75 per cent threshold to trigger an unconditional agreement.

The company’s shares have been trading at a discount to its net asset value – the market value of its portfolio – due to the risk associated with holding large land assets without permission to build.

Elliott has a almost 14 percent holding in Quintain, a regulatory filing from Thursday showed.

The offer respresented a 32% premium to Quintain’s closing share price on July 28, the day before the offer was originally made, rather than the 22% premium the first bid was made at.

A spokesman for Elliott declined to comment on the new offer when contacted by Reuters by email.

The private equity firm has struggled to secure enough support from Quintain shareholders to declare the offer unconditional and has had to twice ask the United Kingdom takeover panel to extend the bid deadline.

Shares in Quintain were up 7.0% on the news to 140.75 pence, one of the best performers in the FTSE All-Share.