DTZ sold to UGL via pre-pack administration

UGL has completed its acquisition of DTZ for £77.5m, plus an adjustment for cash, via a pre-pack administration.

In a stock market announcement this morning DTZ said the acquisition, completed yesterday, was for all the trading operations of the DTZ group on a going concern basis, securing “full continuation of the DTZ group's business for its clients and staff”.

Ernst & Young, which was called in to handle the pre-pack, added in a statement: "As a result, the business will continue to operate as a going concern, safeguarding approximately 4,700 jobs.”

An administrator was appointed before the sale to DTZ Holdings and the company requested that it cancel with effect from 08:00 today its shares from trading on the official list of the UK Listing Authority.

It added that none of the DTZ group's trading subsidiaries are being placed into administration and they will continue to trade normally.

No company in the DTZ group other than Holdings has entered any form of insolvency process.

DTZ shares spiked upwards by 38.07% or 2.35p to 8.51p by Wednesday of last week giving the company a market capitalisation of £22.67m.

Since DTZ announced it had received bids that represented minimal value for shareholders on 7 November shares had stuck at around 3p after tumbling by 89.41% to a low of 2.25p.

The tie-up creates a group with combined 2011 revenues of £1.2bn creating the third highest player in real estate services globally.

The combined property services business would have approximately 24,000 permanent employees, 225 offices and operate in 45 countries.

UGL emerged as the favourite to buy DTZ following the collapse of majority owner SGP’s bid for the group in October.

SGP, which owns a 55% stake in DTZ, made an initial proposal in May to take DTZ private and then sell immediately to BNP Paribas.

Little is known in the UK of UGL, which in part grew out of Price Waterhouse and Knight Frank’s venture Knight Frank Price Waterhouse Property formed in 1996.

The company is listed on the Australian exchange and has a current market capitalisation of A$2.1bn.

However, the corporate real estate advisory, integrated facilities management and project management services business has been seeking a platform in the UK and circling DTZ to that effect for several years.

The deal cannot have been harmed by the fact that UGL Services’ current chief is Robert Shibuya, a former COO in the Americas for DTZ.

The company, which has a total revenue of A$4.6bn (£3.0bn), provides construction, maintenance and asset management services to the rail, resources and infrastructure sectors and corporate real estate, facilities management and business process outsourcing services to property users.

Its clients are blue-chip companies, governments and institutions in Australia, New Zealand, Asia, North America and the Middle East and it has partnerships with companies including GE, Mitsubishi and Alstom.

CoStar UK News