Ely to develop creche chain in Republic

Ely, the property management company that is the subject of a takeover bid from Newcourt, is expanding into the development of a series of creches in the Republic. Shareholders in the firm have been told it has agreed heads of terms on five creches and, in connection with this, is "well underway" to putting tax-based partnerships in place.

Details of Ely's current activities are contained within an offer document sent by Newcourt to Ely shareholders on Monday evening. The document outlines the terms of Newcourt's £15.2 million (€22.3 million) offer for the property business.

Ely notes that it expects an entity called the Creative Education Company plc to take on the operation of the creches in early 2007. Shareholders are also told that Ely has started to build student accommodation units in Maidstone, England and has taken possession of a site in Islington, London.

It has also entered into an agreement to sell 50 units in a development in Portsmouth under a sale and leaseback scheme. In the Republic, it says it expects to sign management contracts for two developments in Dublin in the coming weeks.

The board of Ely has recommended the Newcourt offer, which amounts to 5.632p per share. It is subject to an 80 per cent acceptance rate. Ely directors, who control 76.9 per cent of the company, have irrevocably committed to accepting the deal.

As well as making the offer in cash, Newcourt is providing a non-transferable convertible preference share option, which provides two such shares in return for every 127 Ely shares, and is thought to be aimed mainly at locking in key employees.

Newcourt plans to fund the takeover from a mixture of loans, cash resources and the proceeds of a €9.1 million placing. The company has committed to running Ely as a separate division and has invited Ely chief executive Philip Marley on to its board.