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Bulgarian Property Developments has rejected a mandatory bid from Windsorville Investments.
Windsorville acquired 10.65m shares at 16p each and this triggered the mandatory bid. This took its stake to 35.6%. Windsorville wanted to gain control of BPD at the beginning of 2008 but BPD headed this off by offering shareholders a 19p a share special dividend, which was paid in July 2008.
The bid values BPD at £17.3m, which the company‘s management says significantly undervalues BPD. At the market price of 16.5p a share, BPD is valued at £17.9m.
Excluding the dividend, cash was £5.6m at the end of June 2008. Stripping out the dividend from the underlying NAV gives a figure of 63.7p a share at the end of June 2008. An increase in the planning density of the Sofia Central site would add another 23p a share to the NAV.
BPD promises a new valuation of its property portfolio shortly.
Fairplay failed to go through the €15m acquisition of a 50% stake in Varna Logistics, so BPD says that it is entitled to a penalty of €3.9m.
At the time of the interims in September 2008, BPD’s management said that the Bulgarian property market was not suffering as much as some other European property markets.
BPD ditched Fairfax IS as its broker in January 2009. Matrix is its nominated adviser and broker.
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