Lord Foster has already put his penthouse at the London practice on the market
Architect Lord Foster will sell all or part of his practice within three months – and has already put his penthouse at the firm’s headquarters in Battersea, west London, on the market.
A source close to Foster and Partners confirmed that the deal was at an advanced stage and that a shortlist had already been drawn up. The source said: “There are serious options on the table. It has already got to a level where certain interested parties have been told not to proceed. This is expected to be wound up within two to three months.”
The news came after it emerged that Foster had, in the past 12 months, appointed corporate financier the Catalyst Investment Group to explore options for the future of the practice, including a sale or partial flotation.
Initial estimates have valued the 40-year-old practice at £300-500m, although many claim that the price is too high.
Stewart McColl, SMC’s chief executive, said it depends on growth over time. He said: “If it was bought on an initial payment followed by additional payments over the years, it could be worth that amount.”
In 2004/05, the firm had a turnover of £45m and pre-tax profit of £2.5m. Foster owns more than 90% of the equity and could potentially make about £450m from the deal. It is not certain whether or not he will retain a stake in the firm.
A spokesperson for the practice said the sale would settle speculation about succession plans and would also ensure funds for further international expansion.
Foster has been winning an increasing amount of international work – more than 50% of the firm’s work is now abroad. Two new offices, in Madrid and New York, will open this summer.
The source added that it would be crucial to the deal that Lord Foster remained at the practice and that the 71 year old had no plans to retire “even if someone bought 100% of the business”.
Industry insiders point out that Foster is crucial to the Foster and Partners brand and that he has vowed in the past to take the name with him when he eventually leaves. The source said there were no plans to change the name “for the foreseeable future”.
Observers also predict that interested parties could include US and Russian companies keen to get a foothold in markets that Foster is already established in, such as Kazakhstan, Turkey and China.
It is understood that none of the practice’s 850 employees, except for three senior partners, were aware of the potential sale. Many are understood to be shocked, but also relieved that a succession plan has finally been put in place.
The three senior partners, Spencer De Grey, David Nelson and Graham Phillips, were promoted to executive roles two years ago. Grey and Nelson became deputy chairmen and Phillips chief executive. They are also directors of parent company Foster Group (International) Limited, with Foster himself.
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