Two highly public takeover bids in the British property sector have been more or less decided in the past week. Both have been the source of a good deal of acrimony.

The assets of Chesterfield are being acquired by Quintain Estates and Development and Benchmark Group, mostly for cash, while G2 Estates, a newly-formed company backed by Mercury Asset Management and Merrill Lynch, is acquiring Greycoat for 260p per share in cash. Significantly, neither company winds up in the hands of its first bidder, suggesting that both may have made tactical errors.

But in an industry crying out for consolidation, what lessons can shareholders learn from the experience? Overall, four central lessons emerge.

First, if a significant change of strategy is agreed, let your largest shareholders know immediately.

Second, cash is king. It is becoming clear that the much hoped for consolidation in the sector will not come through mergers. "What we are talking about isn't consolidation," says one corporate financier. "It's elimination."

Third, a hostile bid is a last resort. Such a bid, launched without at least an approach to management, is bound to antagonise shareholders.

Fourth, off-market deals are likely to produce the best price for buyers only.

Consider the circumstances of Chesterfield, a small quoted company. Its chief executive's appointment two years ago was greeted with great excitement by shareholders, but its performance since then has lagged expectations.

So, in December, when the company said it intended to liquidate its portfolio, it should have been good news. But within days, there was investor unease.

It emerged that deals to sell parcels of properties had already been agreed, and one, a sale to GE Capital, would see chief executive Robert Maxted departing to oversee that portfolio. On March 1st, the company revealed some details of the sales, noting, unusually, that its net asset value at year-end would be lower than that of 1997.

Last week, Chesterfield reported year-end NAV of 491p per share against 612p the year before. When Quintain Estates stepped in and offered to pay 50p per share more than that, mostly in cash, shareholders seemed minded to accept.

Although Mr Maxted played no part in the negotiations, investors felt uncomfortable about the transaction.

THE story was very different at Greycoat, arguably the most frequently inplay company in the sector. The volatile shareholding in Greycoat was that of Active Value Fund, an investor which had been seeking a buy-out of Greycoat for years.

Last autumn, Active Value began hawking its stake around the market. Greycoat officials said they were aware that the terms of the fund required most of it to be sold by December 31st.

Delancey Estates, a company controlled by the families of George Soros and British Land chairman John Ritblat - and whose managing director is Mr Ritblat's son, James - purchased just over 7 per cent of Greycoat and an option to acquire more.

But unknown to Delancey, last December, Greycoat's directors, after consultation with its advisers, NM Rothschild, decided the company was too small to continue in its present guise and decided to put it up for auction.

"We knew the 1998 results were going to be good, so we wanted to announce the auction when we made these public," says one executive. The date was set for May 8th, 1998.

But in February, James Ritblat quietly began approaching Greycoat's shareholders, seeking support for a bid.

The investors said they were non-committal, but at least one informed Greycoat's directors.

According to those familiar with the talks, Greycoat then made the shareholder an insider and revealed the decision of the previous December.

The following week, Delancey announced an all-share hostile bid, denounced as "derisory" by Greycoat, which simultaneously revealed its self-auction plans. Delancey later moved to improve its bid slightly, adding a small cash element.

But it opened itself up for abrasive comment from Greycoat, which chose to feature photographs of some of its less salubrious properties in its defence document and pointed out the incentive terms of Mr Ritblat's contract allowing him to acquire shares at a discount.

Arguably, Mr Ritblat did well out of his bid. He received a price per share for his Greycoat stake well above the purchase price, and signalled widely that he is on the acquisition trail.

But unless Mr Ritblat, and others like him, can absorb the four lessons, consolidation is still a long way off.