UK – Aberdeen Asset Management has announced it will not sell Aberdeen Property Investors to British Land Co. and that it will retaining the business.
The announcement came as a surprise as Aberdeen and British Land had been in talks for several months over a sale or partial sale of API, but a disagreement over the valuation appears to have led the two companies to end the talks.
Says Aberdeen’s chief executive, Martin Gilbert: “We are disappointed that the discussions with British Land have been terminated, but API is an excellent business and both we and API management team believe that more value can be provided to Aberdeen shareholders by retaining the business rather than selling it at a depressed valuation.”
Aberdeen announced last December that it was planning to dispose of its majority interest in API as part of a strategy to “shed non-core activities” following falls in revenue and funds under management of the Aberdeen group.
Since the beginning of 2003, however, the group has seen its balance sheet greatly improve. Early this year, Aberdeen AM sold six of its funds to New Star Asset Management for about 92.5 million pounds (132 million euros), enabling it to reduce its debt. Support from the Bank of Scotland has also taken the pressure off to sell API, said a spokesman for the company.
“The reduction in debt, and the relationship with the Bank of Scotland have taken away the pressure to sell. Furthermore, the price was not right, and API is too good a business to sell cheaply,” he added.
Aberdeen now intends to retain API as part of its wider fund management operations. Says Aberdeen: “With funds under management of six billion pounds, API is one of Europe’s leading property fund managers and has the potential to grow substantially over the medium term.”