Property Week, November 2003
James Whitmore

WEDNESDAY'S TAKEOVER OF SLEEPY OLD £50m housebuilder Swan Hill, better known in its previous guise of Higgs & Hill, may not appear to have the oomph that the protracted battles at Canary Wharf and Chelsfield possess. In fact, it has the wow factor in bucketloads - more glamour, drama and stealth than almost any property company takeover I can remember.

Anton Bilton - he of the famous property family and boyfriend of it girl' Lisa B - has teamed up with Glyn Hirsch, ex-investment banker, ex Chief Executive of CLS Holdings and current Chairman of John Sims' Property Fund Management, to make the cheekiest of bids for Swan Hill. Bilton and Hirsch are joined by Robert Ware, the former deputy Chief Executive of MEPC, who is a nonexecutive director, and James Hyslop, the former head of property at PDFM, who is non-Executive Chairman.

Using a strategy only adopted once before - by Nick Oppenheim in his takeover of Allied Leisure in 2000 - Bilton and Hirsch have gone behind the backs of Swan Hill to secure the backing of its institutional shareholders to transfer Swan Hill into a new AIM-listed company, Raven Mount. Blue-chip shareholders Schroders, UBS, Jupiter and Silchester, which account for 52% of Swan Hill's shares, have given irrevocable undertakings to accept the offer. The interesting thing is that they are not being offered cash, but simply one share in Raven Mount for each of their shares in Swan Hill.

Bilton and Hirsch have aligned themselves with the shareholders, by subscribing for 2.5m Raven Mount shares at 80p each and for a further load of convertible shares, which will give them 15% of the company if its shares perform well.

Both Oppenheim's takeover of Allied Leisure and Raven Mount's of Swan Hill were put together by German investment bank WestLB.

Once the takeover is complete, Bilton and Hirsch will carry out a review of the Swan Hill assets. Its housing division, which describes itself as a specialist builder of highvalue, premium-quality homes, has three offices in Staines, Horsham and Bristol and a balanced spread of sites across the south of England.

Its property division owns a share of the Wellington Square shopping centre in Stockton-on-Tees, near Middlesbrough, and a mixed-use scheme in Cagnes-sur-Mer in the south of France.

I expect Bilton and Hirsch to initiate a fairly rapid break-up of the assets. Swan Hill's net asset value of 130p compares with a share price of below 80p before news of the bid, which means they and the shareholders are likely to make a sizeable profit. When they have finished with Swan Hill, there is no reason why they should not turn their attentions to other underperforming property companies, using the same takeover template - taking over a company where there is a large disaffected institutional shareholder base and a small management shareholding.

Swan Hill's chief executive John Theakston, who is as charming a Chief Exec as you could wish to meet, was totally unaware of the behindthe-scenes manoeuvring.

But having presided for many years over a company that has underperformed, he is learning the hard way what the new wave of shareholder activism is all about.

James Whitmore is deputy editor of Property Week