Merrill Lynch sells stake back to Green Property

Investment bank Merrill Lynch has sold nearly all of its interest in former Irish plc Green Property to the company's management, leaving them and Bank of Scotland with joint control of its €1 billion portfolio of assets.

Merrill Lynch held 49 per cent in Rodinheights, the vehicle which bought Green for €1.05 billion two years ago. It has sold 48 per cent to the property company's management, led by Mr Stephen Vernon, who held 2 per cent, and another 1 per cent to Bank of Scotland, which had the remaining 49 per cent in Rodinheights.

The deal effectively leaves management and Bank of Scotland with a 50/50 share in Green Property. The company's biggest asset is Blanchardstown Shopping Centre in west Dublin. It is currently completing a 130,000 sq ft extension to this, which will be anchored by British multiple Marks and Spencer.

Green holds a number of other commercial premises in locations around the capital such as Leopardstown and Sandyford. Its portfolio is valued at €1 billion.

Mr Vernon said yesterday that its Irish property portfolio had increased in value but added that yields from a number of its commercial properties in Dublin's suburbs had dropped slightly over the past four years.

Since Green went private in August 2002, it has sold close to €1.4 billion worth of properties in Ireland and the UK. It has no remaining interests in the latter market. Last February it completed a €710 million debt refinancing with Bank of Scotland, which also provided a debt facility to fund the transaction announced yesterday.

None of the parties would reveal the price paid for Merrill's interest in the business. Yesterday, Mr Vernon told The Irish Times that Merrill decided to sell out after achieving the returns it had targeted when it took part in the privatisation.

"They had certain objectives to achieve and they have achieved them," he said.

Mr Russell Jewell, managing director of Merrill Lynch, said the company was happy with the successful performance of its investment in Rodinheights.

Mr Vernon said the deal marked the end of the public-to-private transition and added that the company had returned to a position from which it could restart developing and growing the business.

"The new shareholding and financial structure arising out of this transaction provides a platform for the future development of the company consistent with Green's traditional areas of activity in commercial property investment and development in Ireland and the UK," he said. "The company is now ideally placed to pursue a strategy of growth and development."

Bank of Scotland indicated that it intended to remain involved with the company for the long term.