Board fury as chief stalls Chelsfield bid

PROPERTY tycoon Elliot Bernerd is coming under pressure to break the logjam stalling his attempt to take Chelsfield private.

The chairman's plans have been delayed by a wrangle over the value of a crucial part of the business, and now he has been given a deadline of September 8 to either come up with a firm bid or face the wrath of Chelsfield's directors.

Bernerd is ready to launch a management buyout, backed by HBoS, which will value the property empire he founded and which floated in December 1993 at about £1 billion.

But the complex Global Switch business is proving to be a sticking point in talks with Chelsfield's directors.

Global Switch provides locations where businesses can safely house their computer and telecommunications facilities away from their offices to guard against natural disasters and terrorist attacks.

Bernerd is keen to make sure he does not overpay for Global Switch, which was hit hard in 2002 by the collapse of its second largest customer, telecoms company KPN Qwest. It is the slow progress of talks over the business that has held up the progress of Bernerd's bid.

One insider said: 'I think that the initial feeling within Chelsfield and in the wider business communitywas that this bid would come quite quickly. Now that does not seem to be the case.

'Global Switch is definitely the sticking point and the management buyout process is grinding along pretty slowly at present.'

The senior non-executive director, Sir Bruce MacPhail, is understood to have indicated to Bernerd that the directors want him to make his move for the company by the time Chelsfield's final year results are announced on September-8. 'There is a definite feeling that it would not be good for the company as a whole if this thing dragged on much longer,' one City source commented,

'Sir Bruce MacPhail is very proper about how he does business and he clearly wants to see this management buyout, if it comes, out on the table where everyone can see it.

'It now seems likely that any bid will come either before or possibly on September 8.'