Max Property : MAX – sales of portfolio and planned return of cash

The Board of Max Property, owner of a portfolio of property that includes St. Katherine’s Dock (pictured), has announced this morning that it has received an offer for its entire portfolio. A company controlled by Blackstone Real Estate Partners Europe IV has offered £414.2m in cash for Max’s portfolio – 22% more than the valuation of the portfolio at 31 March 2014. The deal values the whole company at £444.7m (this number includes a distribution of £33m in cash that Max Property has already announced). The deal needs to be approved by 50% of Max’s shareholders and the announcement says that 46% have already said yes. Assuming the deal goes through, the Board say the net cash return to shareholders is likely to be 184.2p per share – a 13.2% compound return since launch. Shareholders are already due to get 15p per share on 23 July and the Board say a further 168.7p could be paid on or around 21 August 2014. The company would then be liquidated and shareholders might get an additional fraction of a penny per share.

On a gross basis the sale price is equivalent to a 112% return on Max’s opening asset value five and a quarter years ago. Under the terms of the performance fee arrangements Och-Ziff, a cornerstone investor in the company, the management team and affiliates of the management team will share £40.3m in fees – 20% of the return generated by the company, triggered only if returns exceeded 11% per annum.