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Strong UK presence would be crowning achievement for French bank if merger talks succeed
DTZ majority shareholder Saint George Participations' (SGP) talks with the firm and the potential involvement of BNP Paribas have raised the prospect of a new global agent with extensive coverage of Europe, Asia and Canada.
BNP Paribas Real Estate has long been named as a suitor to DTZ. BNP PRE is also understood to have looked at acquiring Cushman & Wakefield.
However, US regulation forbids listed banks from owning property companies and BNP Paribas would need to delist in the US for that to work. BNP PRE staff have been aware for some time of the French bank's stated desire to have a UK agency fully integrated by the middle of next year. A period of five years has been talked about as a more realistic timescale to complete the integration of DTZ.
Moving towards full ownership
The first step, albeit an unusual one, has been made towards a full merger. SGP, which owns 55% of DTZ, is understood to be moving towards full ownership of the agency before selling to BNP Paribas. Many wonder why BNP Paribas lets SGP do the work of acquiring DTZ for it.
SGP's potential offer, at 6op a share, values DTZ at euro162m (euro185m). SGP, held by the Mathy family (see box opposite), has appointed Hawkpoint as adviser and stressed that talks are preliminary, with no certainty of a deal. No internal communication has been made by BNP PRE, and staff have been following developments via the UK media. Although there have been no internal e-mails so far, the move is discussed in senior BNP PRE management meetings.
A merger of BNP PRE with DTZ would trigger a long-anticipated shake-up in a sector in which further consolidation is inevitable. DTZ is still finalising its 2010-11 annual accounts, but adding its historically low 2009 global turnover of £355m (euro405m) to BNP PRE's 2010 revenue of £537m (euro613m) results in a firm that nearly knocks Cushman & Wakefield off the third spot.
However, DTZ is still struggling with the weight of debt taken on when it bought agency Donaldsons in 2007. In the financial half-year to October, DTZ made a pretax loss of £6m on...