British Land picks up Pillar for £811m

BRITISH Land is splashing out £811m for Pillar Property, the UK's largest owner and manager of retail parks. The deal is Land's first significant corporate acquisition under its new chief executive Stephen Hester, who took over from founder John Ritblat in November, and boosts its retail portfolio to about £10bn.

Pillar's founders, chairman Raymond Mould and chief executive Patrick Vaughan, stand to make around £68m from shares and options in the 855p-a-share recommended cash offer.

In return, British Land will gain access to about £2.7bn of property assets which Pillar manages and part-owns via offshore unit trusts of City offices and retail parks.

Pillar's Hercules fund, in which it has a 34% stake, specialises in UK retail parks, including a half share in Beckton's £160m Gallions Reach. In March, its Europark fund bought into what will be Italy's largest park near Parma.

Pillar manages and has a 36% stake in the £581m City of London Office Unit Trust anchored by CityPoint tower near Moorgate.

Land said in a statement today that the acquisitions will 'build on the bedrock of British Land's exciting focus in UK real estate offering growth, quality and security'.

Mould and Vaughan set up the company in 1992 and floated it in 1994 at 150p a share. Mould has 2.4m shares and 1.8m options. Vaughan has 2m shares and 1.8m options.