Dublin-based corporate finance house Ion Equity has entered the race to acquire the freehold interest in Shell's 180 filling stations in Britain.
The company that owns the portfolio, Octane, could cost as much as £425 million (€619.8 million). This includes debt of some £325 million. The properties were put on the market last June by the owners of Octane, who acquired them from Shell in 2000. Octane is controlled by two pairs of brothers: Iranian property magnates Robert and Vincent Tchenguiz, and British property investors Ian and Richard Livingstone.
The properties have an annual rent roll of about £26 million under the terms of a leaseback arrangement with Shell that continues until 2017.
With the selection of a preferred bidder imminent, Ion Equity is said to be among the leading contenders for the portfolio. The others include the British property groups Miller Developments, Moorfield and REIT Asset Management, and the Isle of Man group Golfrate.
An Ion Equity spokesman declined to comment on the process. Ion already featured in a transaction with Shell this year by backing the €200 million purchase of Shell Ireland's oil distribution and service station interests. That deal will close this week. The Ion-backed company, Topaz, will manage the distribution and filling station businesses in Ireland. By contrast, any purchase of Octane would be purely a property play.
The London office of property advisers CBRE, which is advising Octane, declined to comment on the bidders. "We've concluded the second stage of bidding and we are literally deciding at the moment who to run with, out of the bids we have received," said Peter Cooper-Parry, senior investment director at CBRE.
A purchase of Octane by Ion would be the latest foray into the British property market by Irish investors. Most prominent among the Irish interests in Britain is the Savoy hotel group, owned by a consortium put together by Derek Quinlan. Another Quinlan group agreed to buy a retail site in Knightsbridge for £530 million last April.
Investors Mike McDonagh and Tim Bohan spent £175 million acquiring the London headquarters of Dutch bank ABN Amro last July, bringing to at least £272 million the value of their British acquisitions this year.
