Private Equity Firms Show Interest in Brixton
The Blackstone Group and MGPA, two private equity firms specializing in real estate services, reportedly plan to bid in an auction for Brixton Ltd, a troubled London-based real estate investment consortium.
According to the Sunday Telegraph, Blackstone has contacted Brixton. At the same time, reports also came out revealing that MGPA has likewise expressed an interest in the investment trust.
With the bidding turning into a competition, shares from Brixton jumped 11% to 68.5 pence for every share. The company’s market capitalization totaled £185 million, which is equivalent to $293.5 million, or 211 million.
Just this year, 2009, chief executive officer Tim Wheeler left the real estate investment firm. Brixton reported a £768.8 million shortfall in 2008 compared with its £58.2 million earnings two years ago.
The business has experienced a large growth in vacancies. As a result, its banking contracts have been in jeopardy and are most likely to breach when it announces its half-year results. As a result of this, Peter Dawson, who succeeded Wheeler, has been busy leading a campaign that will help raise capital.
Previously, another private equity real estate company by the name of AEW Europe, bought four warehouses from Brixton amounting to $106 million.
Reports on the Blackstone and MGPA bidding interests turned up following Brixton’s announcement that it had joined talks with smaller groups about an initial bid approach. An industrial adversary, Serge, has also revealed it has approached the firm as well.
