--Malaysia's SP Setia, Sime Darby set to acquire Battersea for
GBP400 million
--SP Setia, Sime Darby have 28 days to conduct due diligence,
negotiate contract
--To build new station for Underground's Tube network that will
pass by Battersea
(Recasts lead and adds reason for Sime Darby and SP Setia's bid
in the second paragraph.)
By Jason Ng
KUALA LUMPUR--Malaysia's largest listed palm oil producer Sime
Darby Bhd (4197.KU) and largest property firm SP Setia Bhd
(8664.KU) are teaming up to acquire Battersea Power Station, one of
London's most iconic landmarks, for GBP400 million (US$620 million)
as cash-rish Malaysian firms look to expand overseas.
Buying the Battersea project would be Sime Darby's first foray
overseas and dovetails the company's plans to expand its property
development arm beyond developing townships in Malaysia. It will
also mark SP Setia's first step into Europe after venturing into
Vietnam, Australia and Singapore.
Sime Darby and SP Setia were jointly named the preferred bidder
for site of the decommission power station and have signed an
exclusive agreement with administrator Ernst & Young LLP,
according to a joint statement by the companies Thursday.
Battersea Power Station, which was built in the 1930s, was
closed in 1983. While it became a famous landmark after being
featured on Pink Floyd album covers for its distinctive chimneys,
the site has become synonymous with difficult and ultimately
abandoned property redevelopment schemes. The site, loved by many
Londoners, has been the focus of numerous attempts by various
developers to revive its prospects.
SP Setia and Sime Darby--both cash-rich companies backed by
state-linked funds--said they are planning for a "multi-use real
estate regeneration project" and have committed to the construction
of a new station to be part of London Underground's transit network
that will pass by the site.
The two companies will also preserve the facade of the
historical power plant with its iconic chimney stacks, they
said.
"This is viewed as fundamental to the success of this
regeneration project," they said, adding that they have up to 28
days to conduct further due diligence and negotiate a contract.
Prior to Sime Darby and SP Setia's involvement, Irish property
firm developer Real Estate Opportunities PLC (REO.LN) was forced to
hand over the site of the power station to Ireland's National Asset
Management Agency and Lloyds Banking Group PLC (LYG), senior
creditors of the company.
In December, creditors put the company in administration, which
triggered a sales process run by Ernst & Young and real estate
agents Knight Frank. NAMA and Lloyds are owed GBP334 million in
aggregate, while junior debt accounts for another GBP168
million.
The Malaysian group was going up against another consortium
headed by veteran British property investor Godfrey Bradman, who is
backed by the billionaire real-estate investors the Reuben
Brothers, to buy the site out of administration, people familiar
with the matter said earlier.
It is unclear whether Chelsea Football Club PLC, owned by
billionaire Russian oligarch Roman Abramovich, tabled a bid in time
for the deadline. Press reports have suggested the club's owner
tabled an offer significantly lower than other competitive
bids.
Write To Jason Ng at jason.ng@dowjones.com