British Land to exit joint venture with Dunloe

British Land moved yesterday to exit its joint venture with Dunloe Ewart, realising a profit of more than €20 million on the sale to Dunloe of its 50 per cent interest in the project.

The companies said in a joint statement that they had "different medium-term objectives", leading British Land to exit the project.

The London-based company will receive €63.85 million in cash from Dunloe Ewart for its interest in Cherrywood Properties, the developer of some 412 acres at Cherrywood, south Dublin.

It acquired the stake for €42.54 million in April 1999 in a transaction which returned a €12.69 million profit to Dunloe. According to Dunloe's 2001 annual report, some €2.54 million of the consideration deferred in 1999 was still outstanding at the end of last year, "but is contingent on the completion of certain infrastructure works".

While the latest proposal is subject to the approval of Dunloe investors at an e.g.m. in early October, the company said in a stock exchange statement that the proposal "can be seen as a once-off opportunity for shareholders". Because only a simple majority will be required to pass the deal, Dunloe's largest shareholder, Mr Liam Carroll, will be unable to block the proposal.

Owner of some 27 per cent of the company, Mr Carroll has consistently thwarted plans put forward by the company's chairman, Mr Noel Smyth, who, with his wife, owns about 22.47 per cent. There has been virtually no formal contact between the two individuals.

Dunloe's statement said: "The proposed acquisition of Cherrywood offers Dunloe the opportunity to control and maximise the profitable development of one of the largest and most unique development sites in Dublin."

When the deal was announced in 1999, Mr Smyth cited the "extensive financial resources and development experience" of British Land.

A proposal by British Land that it would spend €7.7 million purchasing some 5 per cent of Dunloe at that time was described by Mr Smyth as a "further vote of confidence" in the company. However, a Dunloe spokeswoman said yesterday that that particular proposed investment by British Land never materialised.

On claims by certain observers that the relationship between Dunloe and British Land was not good, she cited the statement which said the two had different medium-term objectives. She said "yes" when asked whether this was a reference to the Cherrywood development.

A British Land spokesman was asked a number of questions about the proposed deal and the company's relationship with Dunloe but he failed to return with responses.

British Land is understood not to have been informed by Dunloe of a recent attempt to use some of the Cherrywood properties to end the stand-off with Mr Carroll.

It is believed that British Land had "no knowledge" of a proposal by Mr Smyth to exchange Mr Carroll's shares for some 60 acres on the site for €40.7 million, subject to rezoning. Mr Smyth also offered to exchange Mr Carroll's stake for Dunloe's €20 million interest in a building on the site leased by Friends First, together with a €20.7 million cash balance.

The stand-off has led Mr Smyth to make a complaint about the conduct of Mr Carroll's own companies to the Director of Corporate Enforcement, Mr Paul Appleby. Neither Mr Appleby's office nor Mr Carroll has made any public comment on the complaint.

The statement said the profit attributable to Cherrywood Properties Ltd and its subsidiaries in 2001 was €5.35 million.