Buyout tycoon Guy Hands is plotting a £2.5bn takeover of Quintain, the property company behind the Wembley Park development.
Hands' private equity firm Terra Firma is looking to make the bid through its existing property company Annington, Sky News first reported yesterday. Terra Firma bought the Annington Homes military housing group from Hands’ former employer, Japanese bank Nomura, in 2012, and the business has more recently been exploring moves into the broader residential market.
Quintain's current owner, US-headquartered private equity firm Lone Star Funds, has set an initial deadline for bids of early next month. City sources expect high interest, according to Sky News.
Hands secured a refinancing for Annington last year, raising £550m of new equity and £3.4bn of debt to help it push into the private rented sector.
However the deal which saw Hands take control of the military properties has been criticised by the National Audit Office (NAO), which has warned that the Ministry of Defence (MoD) lost out on billions of pounds by selling the properties and could face huge costs as Terra Firma-backed Annington hikes rents.
Yet a merger between Annington and Quintain could make the group more attractive to investors, helping Hands to secure an exit.
Hands has been trying to raise a fresh buyout fund for several months, City A.M. understands. But no news of a fund close has emerged, and several industry sources have questioned whether the buyout boss will be successful.
He saw he reputation damaged by a soured acquisition of music label EMI, which led to a massive lawsuit with US bank Citi eventually dropped two years ago. Hands was reportedly left out of pocket by £200m by the saga.
Added to that, Terra Firma's investment in care homes group Four Seasons has been effectively rendered worthless as the group struggled to survive.