Chelsfield chairman's £857m bid

ELLIOTT Bernerd, chairman of Chelsfield, has tabled an long-awaited indicative offer of 305p a share in cash, valuing the property group at about £857m, it was announced today.

The buyout is being backed by a consortium that also includes Saudi heiress Lubna Olayan, the billionaire Reuben brothers as well as David KP Li, a leading business figure in Hong Kong and non-executive director of Chelsfield.

However, the terms are substantially below what the City had been expecting.

With the group's share price at 315p, there is a belief that the consortium, which speaks for about 30% of the company, may be gazumped by a rival, or a that the buyout team may have to offer more. Standard Life, a 3% shareholder, has already warned it will reject any offer substantially below 400p.

Chelsfield's independent directors are believed to have rejected an initial approach of 300p a share made by the consortium during discussions earlier this week.

In addition, the directors have left the door ajar for a higher offer by opening Chelsfield's books to any interested buyers. In a statement, Chelsfield said the consortium would be prepared to sell its 30% stake in the event of a recommended offer from another suitor if the independent directors deemed it better value.

'The independent directors believe that this proposal may not fully reflect the long term value of Chelsfield but recognise that it is at a level above the net asset value of 299p,' it said.