Private equity firm Lone Star responds after hedge fund takes a 12.9% stake

Wembley North West

Wembley North West

Lone Star has increased its offer for Wembley developer Quintain to £745m and again pushed back the deadline for acceptances.

Under the new terms of the increased cash offer, Quintain shareholders will receive 141 pence per Quintain share, 10 pence more than the previous 131 pence per share offer.

Lone Star said the increased offer is final and will not be extended past the new deadline of 1pm on the 10 October. The offer is being made through Lone Star’s investment vehicle Bidco, which is indirectly controlled by Lone Star Real Estate Fund IV.

Quintain’s board issued a statement this afternoon recommending the improved offer to shareholders.

The new offer and deadline comes after hedge fund Elliott Capital Advisers took a 12.9% stake in Quintain via a contracts-for-difference arrangement

At the close of the second deadline at 1pm on 23 September, Bidco had received acceptances for the cash offer from 71.73% of the existing shareholding of the firm – it requires 75% to accept in order for the deal to go ahead.

Bidco had at the end of last week lowered the acceptance threshold of the offer from 90% to 75%, having originally only received a 53% take up of its offer.

Lone Star has said its offer would allow Quintain to more rapidly build out its Wembley development, but according to The Times, Elliott Capital Advisers believes the “offer substantially undervalues the company [Quintain]” and does not accept it.

Bidco is financing the increased cash offer through a combination of equity to be invested indirectly by Lone Star Real Estate Fund IV and debt to be provided under the Credit Agreement.