Lehman Brothers has made a partial exit from its investment in Burford Holdings, the property company it took private through an MBO last year. Burford Group, a wholly-owned subsidiary of Burford Holdings, has been sold to City & General and Uberior Investments (a subsidiary of Bank of Scotland). The value of the deal was not disclosed.
In December 2000, Thayer Properties, a vehicle backed by Lehman Brothers and members of the company’s management team, paid GBP498 million for Burford. The company, which owns London’s Trocadero and Mayfair Place, was one of a number of property companies that de-listed last year, due to low public valuations. The deal valued Burford at approximately
GBP920 million, including net debt of GBP422 million. Lehman Brothers Group also underwrote the debt financing for the original deal.
The new group, which will be known as CGIS Group Limited, comprises 16 commercial property investments (mainly retail, office and industrial properties) valued at GBP250 million and generating annualised rental income of GBP17.5 million. The sale also includes GBP146 million in listed mortgage debenture stock. City & General, represented by newly appointed directors, Mark Steinberg, Terence Cole and Steven Collins, will own 70 per cent of the company’s issued share capital, in the form of “A” shares. Uberior will own a 30 per cent stake, in the form of “B” shares.
Burford Holdings, still under the ownership of Lehman and the original management team, led by John Anderson and Julian Gleek, retains a property portfolio worth over GBP750 million. Wilson Lee of Lehman Brothers said: “Some of Burford’s more recent acquisitions, such as the Trocadero, offer great value-improvement opportunities, which we continue to develop. From the outset our intention was also to re-capitalise the company and clean up the balance, which we’ve partly achieved with this deal.”