The deal between DTZ, Saint Georges Participations (SGP) and BNP Paribas real estate had to be aborted, causing share prices to plummet.
SGP, which currently owns 55 per cent of DTZ was in talks to buy the whole company to turn it into a private firm, before selling it straight onto BNP Paribas real estate. Due to the continuing economic downturn in the financial markets, the deal had to be terminated, even though all three companies were eager to complete.
However, losing the deal is not the only blow that SGP and BNP Paribas will now face. As a result of the deal falling through, the two companies are subject to restrictions imposed by Rule 2.8 of the takeover code. A DTZ announcement stated, “Accordingly, in accordance with Rule 2.6(a) of the Code, SGP must, by no later than 5.00pm on 17 October 2011, announce a firm intention to make an offer for DTZ in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.
This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code. As BNP Paribas is acting in concert with SGP in relation to SGP’s possible offer for DTZ, BNP Paribas is therefore subject to the restrictions imposed by Rule 2.8.”
Following the reports confirming that the deal was no longer happening, shares in DTZ dropped from over 50 pence earlier this year (before the deal was even discussed) to 27 pence, which is the lowest share value for the company since November 2009.
Tim Melville-Ross, Chairman at DTZ expressed: “The external environment has contrived to prevent the considerable efforts of many people over the past months to consummate a transaction. The Board welcomes the renewed support of our largest shareholder and our bank, which will provide comfort to clients and staff as we act to take the business forward.”