Managers set to buy out Saville

SAVILLE Gordon Estates said it was going private in a £200m management buyout as it unveiled a 13% drop in pre-tax profits. Although rents have held up well, there was virtually no growth in the the value of the assets and the directors, led by the chief of Morgan Stanley's property division the Morgan Stanley Real Estate Fund, are offering 121.3p a share for the entire stock.

This includes a 3p final dividend, which was announced today along with the results but will be paid only if the deal does not come off. The offer represents a 16.6% premium to Thursday's closing share price of 104p and a small premium of 2.6% to Saville's net adjusted value of 118.3p a share. Morgan Stanley is also taking on £300m of Saville's net debt, giving the group a total value of £498.8m.

James Hyslop, non-executive chairman, has already pledged his shares to Morgan Stanley and along with other promises, the bank is claiming it already has 25% of the shares.

Saville develops and lets warehouse space. The firm's drop in profits to £15.1m for the year ended 30 April was partly due to one-off costs including £1.4m write-offs relating to Brymbo Developments and £369,000 on aborted transactions.

The total value of the portfolio was down slightly at £560m, compared to £566.6m last time.