DTZ shares suffer after takeover talks fail

The firm, which has offices in Edinburgh and Glasgow, blamed global economic turmoil and the eurozone debt crisis for the failure to strike a deal, which would have been part-funded by French bank BNP Paribas.

Family-run French property group Saint Georges Participations (SGP), which owns about 55 per cent of London-listed DTZ, had until yesterday to make an offer for the rest of the shares or walk away under stock market rules.

SGP first signalled its interest in taking the company private in May in partnership with BNP Paribas Real Estate. It is thought a deal would have valued the company at about £162 million.

DTZ chairman Tim Melville-Ross said: “The external environment has contrived to prevent the considerable efforts of many people over the past months to consummate a transaction.”

Chief executive John Forrester said the problems faced by the French banking system due to the eurozone sovereign debt crisis had proved a major stumbling block. “This was nothing to do with DTZ. BNP was very attracted, and that’s why talks went to the last minute,” he said.

But Forrester, who was promoted to the top job in August following the departure of Paul Idzik, said the protracted negotiations had affected the company’s performance. He said: “The takeover uncertainty meant we did not win as much work as we would have liked.”

He declined to say how much business the firm had lost. DTZ reported a “varied start to the year” in a trading update last month. Forrester said he would continue to cut costs, staff numbers and debt.

He added that DTZ did not anticipate more takeover offers because a lack of debt availability made deals of that size difficult to achieve. This summer, Australian firm UGL was also reported to be mulling a bid.

SGP took its holding in DTZ beyond the 50 per cent mark as part of a fundraising by the British company to keep itself afloat in the aftermath of the financial crisis, when plunging property markets sent it deep into the red.

The firm returned to profitability in 2009-10 but this summer posted a “disappointing” £600,000 loss for its last financial year. Revenues at the company, which has debts of almost £64m, slipped from £356m to £341.3m in the year to 30 April as it experienced “varying” trading conditions in the 42 countries in which it operates.

Yesterday, the firm also announced that a new £10m credit facility with Royal Bank of Scotland and SGP had been agreed.

Shares in DTZ fell 12.8 per cent to 23.75p, about half their level of 12 months ago.

DTZ revealed last month it faced action from the UK Listing Authority after failing to disclose changes to Idzik’s contract regarding the criteria for payments the former chief executive is entitled to after resigning from the company earlier this year.