London-based developer Minerva, which has been the subject of takeover rumors for some time, has received interested from Limitless, the property development arm of Dubai World.
After much speculation, Limitless has acknowledged that it is considering a bid for the developer. It has not made any formal approach, but the news that they are considering one has already driven up investor interest in the company. Minerva is now 23 percent higher after the news, at 124p.
Limitless is the first potential bidder to acknowledge publicly that it is considering a bid, although other bidders have been reported to be looking at it, including New York-based real estate investor LeFrak. Analyst have suggested that a bid could be worth up to £322 million ($644 million).
Limitless currently owns a 3 percent stake in Minerva. The firm was forced to release a statement after investors observed the unusual share price rise in Minerva.
Minerva has drastically de-rated as the UK property market experienced a downturn. It is now trading at a discount of 67 percent to its net asset value. Concerns include its high level of debt and its exposure to the office market in London, which is experience the most trouble and rising vacancies. An acquisition of the company could have the effect of restoring investor confidence in London’s office market.