Romania's BSGP takes 54% in Deutsche Land, makes offer for Rutley European

The AIM-listed Deutsche Land, which has a portfolio of some e560m in office and hotels in Germany, is to make a placing and subscription of ordinary shares that will, subject to approval of shareholders and the UK Takeover Panel, bring in the Romanian company Black Sea Global Properties as majority shareholder with 54% of its equity. Deutsche Land CEO David Maxwell told PFE that the investment, if it goes through in full, will cut loan to value on the portfolio to around 75% from the current 87%. "Even if all each individual financing is ring-fenced I just feel that it is best if you are managing real estate assets in the current climate to have a bit more money around you," he said. Maxwell, who co-founded the company with the late Klaus Fassbender, will remain CEO even after BSGP takes control. Deutsche Land, registered in the Isle of Man, will issue 119m new shares at 12 pence each to raise around e16.4m. Of these just under 30% will be subscribed to by BSGP, a wholly-owned subsidiary of Rompetrol Holding, a company investing in a range of asset classes including direct private equity investments and real estate. RPH is wholly owned by Dan (Dinu) Costache Patriciu, a leading Romanian businessman, and also the CEO of Netherlands-based Rompetrol Group which he founded and developed into the second largest oil company in Romania. Deutsche Land will also issue a further 167.5m shares to BSGP, thereby increasing BSGP's holding to 54.1%. Deutsche Land also announced pre-tax profit after IFRS fair value adjustments and goodwill impairment of e3.0m compared with a loss of e2.7m for the 11 months to 31 December 2007. Net asset value at the end of last year was 54.8 pence, a reduction of 19% in the 12 months. However, the IFRS net loss ballooned to e69.0m from a e12.2m loss in the last 11 2007 months. The per share loss was e34.7, much wider than 2007 loss of e6.3.

Separately BSGP also announced a cash offer to acquire 100% of Rutley European Property. The offer is pitched at 6 pence in cash per Rutley preference share, valuing the existing issued equity at £12.6m and Rutley at an enterprise value of £447m including net debt of £434m as at end-December. The offer represents a premium of 107% to the closing price of 2.9p per Rutley share on 27 March, before the announcement of an approach. (Full story to be published in PFE 125 on 15 June)