Green Property may consider special dividend as Treasury talks collapse

Green Property will consider a special dividend for shareholders or a share buy-back programme, following the decision of Treasury Holdings not to go ahead with a bid for the property group.

Treasury and its partners, Deutsche Bank Real Estate Private Equity, said yesterday they had put forward a proposal that might have led to an offer for Green and had "pursued efforts to explore opportunities to realise value for Green shareholders".

Treasury did not disclose specific reasons for its withdrawal. It is understood that at no stage had its discussions with Green got anywhere close to a formal bid for the company. A spokesman for Treasury said: "We were really interested in doing a deal and had hoped to do one, but we couldn't formulate a proposal acceptable to the Green board."

The withdrawal by Treasury did not come as a major surprise to the market, where the prevailing view was that the approach was too tentative to be considered seriously. "Anybody bidding for Green is going to have to bridge the gap between the price in the market and its net asset value, and Treasury was never going to do that," said one source.

Green's managing director, Mr Stephen Vernon, said Treasury had given a series of indications of what it might offer for Green. "None of these were at a level that the board could recommend." Mr Vernon declined to state what price Treasury had indicated it might offer for Green.

But it is understood that the Treasury indicated offer was slightly more than €7, valuing the property group at €770 million. This is broadly similar to the indicated offer from a management group headed by Mr Vernon, which was also withdrawn three months ago.

Mr Vernon said discussions with Treasury had never reached a due diligence level, but that Green had provided certain information to Treasury on a confidentiality basis. He said Green was not for sale and was not looking for offers, adding that a revival of the management buyout was not on the agenda "for the foreseeable future".

Mr Vernon said Green would now look at various options to provide value for shareholders, but he ruled out splitting Green into two separate public companies - one for its British assets and the other for its Irish assets. He said, however, that the group would look once again at paying a special dividend - as Abbey did to its shareholders earlier this year - or else consider a share buyback programme.

Green shares fell five cents to €6.90, where they are now trading at a 25 per cent discount to its June net asset value of €9.04 a share.

Mr Vernon said Green would carry out another asset revaluation at the end of this year.