THE chief executive of property developer and builder Metnor has made an offer to buy out its shareholders, increasing his stake in the company from 41% to 100%.
Stephen Rankin intends to buy out around 200,000 of Metnor’s shares at 25p each, which would result in a £5m acquisition of the company.
Rankin and his family currently own a large portion of the Newcastle firm, which has a current asset value of £34m.
The company’s three other directors have agreed the offer and it has now been put out to Metnor’s 200 shareholders to consider.
Metnor’s finance director Keith Atkinson said: “Instead of Metnor being owned by the Rankin family and other small shareholders, it will be fully owned by Stephen going forward.
“Nothing will happen to the business and its day-to-day running. It will just be a wholly-owned operation. Shares have been at the 20p mark in recent months so 25p is above what they have been currently standing at.
“However, some shareholders will doubtless think they are worth more than that. Valuing a share, especially in today’s climate, is not an easy process.”
This year, Metnor entered into a joint venture with London-based Templewood Merchant Bank to develop a £120m student accommodation project in Newcastle.
It will be one of the largest student developments in Europe with more than 2,000 beds and associated retail and leisure facilities.
The first phase of 275 rooms is currently under construction and will be available by July next year. The following four phases are scheduled for development over the next three to four years. The Killingworth-based firm, which employs 140 staff, reported a fall in turnover from £51m to £48m last year, but its pre-tax profits were up to £2.4m, compared to £1.6m in 2010. The firm completed the development of a 74-bed care home in East Sussex in June and it is building four further care homes in Poole, Bristol and Edinburgh.
The construction division completed the 98-bed Sleeperz hotel on Westgate Road, Newcastle, with the building being handed over in January.
Although the firm’s construction business is performing well, its mechanical and electrical contracting business endured a difficult year, reflecting the state of the market across the UK.
Revenues halved from £28m to £14m last year and Metnor admits it can’t sustain this reduced level of activity forever and will be monitoring the situation throughout the year.
Despite the company’s success, it does not foresee 2012 producing such a strong performance as a result of nervousness in the market and the difficulties in its mechanical and engineering business.
