Scale of Green move surprises

Green Property has bought back more than 5 per cent of its shares following the collapse of the planned management buyout and…

Green Property has bought back more than 5 per cent of its shares following the collapse of the planned management buyout and the decision by Treasury Holdings not to bid for the company. Green's buy-back plans were well-flagged two weeks ago when chief executive Mr Stephen Vernon indicated the group would either pay a special dividend or buy back some shares; but the market has been taken by surprise by the scale of the buy-back.

On Monday, Davy Stockbrokers went into the market for Green and mopped up 6.1 million shares at €7.20 each - a total cost of €4 million (£35 million). This accounted for 5.5 per cent of Green's total equity leaving Green with room to buy back another 4.5 per cent if it wishes.

It is understood, however, that Green has no immediate plans to buy back more shares and that most loose shareholders have been bought out. "Basically, anybody who wanted to sell has sold," said one source. Green is cancelling the shares rather than retaining them as treasury shares which could be sold back into the market at a later date. The €7.20 price for the buyback is marginally below the share's high for the year, but it reflects a view among Green management that the market has undervalued the shares. Green shares are currently trading at a 25 per cent discount to its current net asset value of €9.04 a share and a far greater discount to net asset value (NAV) when the group's portfolio of properties is revalued at the end of the year. This is expected to push Green's NAV to more than €10.

Two weeks ago, Treasury Holdings - the property company controlled by Mr Richard Barrett and Mr John Ronan - decided not to go ahead with a bid for Green after holding discussions with the Green board. It is understood Treasury never got close to making a formal offer and its indicative offers of around €7.50 a share fell far short of the board's valuation.

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Since then, Treasury has emerged as one of the main backers of the Legacy consortium, which has been given preferred status for the Millennium Dome with an offer of £125 million sterling (€206.8 million).

In September, a management group headed by Mr Vernon pulled out of a buyout when it decided it would not be able to offer a price that Green's independent directors would recommend.