Tuesday 12 June 2012

Damp squibs

Some interesting developments on several fronts in recent weeks.

At Battersea we have had the news that SP Setia have been named preferred bidder and are conducting 28 days due diligence which will determine if the project is something they will or can pursue. A recent Telegraph interview with the boss of Setia told us that they rule nothing out at present whilst also seemingly excluding a stadium. There is much to be read between the lines though. We are still hopeful they will approach the club to take care of the Power Station. A little birdie has told us that the bid from Setia was worth more in the region of 500 million plus a pledge to spend 250 million on the Northern Line extension. Chelsea's bid was more realistic and made on the back of sound advice. The administrators, as we said, went for money (unsurprisingly) but doubts remain about Setia's backers and quite how much of the money they have ready to commit. Which is where CFC might come in. Wandsworth council are not entirely enamoured with the idea of a CFC presence at the site and nor are the GLA but one imagines a tie up with Setia will recalibrate thinking should the prospect of further decay be the alternative.

Which gets us thinking once more about Earl's Court which the same birdie believes is still in the mix. The club's recent dismissive swatting of LBHF's almost jubilant response to the Battersea news was encouraging to see. It is time for that particular nonsense to stop. Since CapCo don't really have any money - and LBHF have even less - we shall see how the pair respond to a bit of wad-waving......

It has been a week of turbulence and damp squibs over at the CPO board. The late notification of EGM resolutions was silly and careless but we can only imagine that the board's one legal expert was too busy with his coruscating and damning report on share issues to ensure procedural correctness. Except, it wasn't quite the bombshell some people hoped and expected it would be. The extraordinary amount of time it took to eventually produce nothing revealing or helpful at all led some to believe it would be explosive. It wasn't and nothing beyond mild incompetence was the result. Lots of options for what to do now gave us a clue as to the subtext Mr Smith wanted to promote (write to people who bought shares and ask them to confess to dodgy dealing etc.) but we ought to now put this irrelevance behind us. The late notification which means a rescheduling of the EGM is largely a collective responsibility and nobody escapes entirely without blame but Frankham should keep a much closer eye on his board and assume nothing is how it should be. We would hope he is calling a meeting of his board as soon as possible to find out what occurred and it would be nice to read the minutes of the meeting too...

The number of resolutions was extremely low and we would have imagined that after the last AGM, shareholders would have bombarded the board with ideas and resolutions. Perhaps they were waiting to see what Mr Smith would turn up in his report before submitting proposals? If so, it is a good job he turned up nothing at all.

Friday 1 June 2012

Battersea bedlam

Myriad reports that Battersea has gone to the Malaysians in recent days, statements from Wandsworth council, then more reports that Bradman was in pole position to build a car park, then stories he had lost his funding from the Rueben brothers, then that the Setia consortium who were apparently in final negotiations to take over the site did not, in fact, have a large pension fund EPF on their team. And that is all in the past five days. And so the saga of Battersea rumbles on. What you don't hear mentioned in all of this is where Chelsea stand and the reason for that is nobody really knows. But we think we do.  

The bid is now down to two; CFC and Setia.  Setia's bid is higher but there are many complex interests to decipher and negotiate in a sale as large and as high profile as this.  The property press are desperate to get a story on Battersea so when they get a whisper, they run with it and fill in the blanks themselves. So partial truths embroidered with supposition (not checked) produce stories of seemingly cast iron accuracy. CoStar news got a jolt yesterday when their much trumpeted piece on Setia's bid with EPF was rubbished by EPF later in the day. It seemed CoStar didn't actually check the veracity of their source leak. There is also the issue of assumed fact; the assumed fact, for example, that Boris will block a stadium. The assumed fact that Wandsworth don't want us there. That last one came into focus recently when the council announced they would be flexible on the use of the power station. That was taken by some to mean they would allow it to be demolished and by others that they were indicating they would be happy for a stadium to be integrated with it.

These deals are surrounded by vultures and vested interests and the press is where people often try to force the issue or get the upper hand. Talk in the definitive and you might be able to establish fact .  There is no question that the administrators are chasing the dollar on this and money will probably, ultimately, talk. And here is something to consider; these stories are emanating from somewhere and whose interests are best served by upping the ante on price? It is not entirely clear whether they will accept last minute bid increases.  But as with everything else like Earl's Court and the LBHF claims, we would urge readers to look at the entire picture and not hop from one story to the next. 

If Setia do indeed claim victory - and now that their apparent partner has been revealed not to be one, that is not a certainty - then we would suggest the game is not even then over. Our belief is that there is strong possibility they might approach Chelsea. Stories (those hitherto inaccurate stories) have claimed Setia want to go with more housing stock and others have suggested they will go with the existing masterplan but we really don't think we should assume that is entirely correct. Wandsworth's recent statement could well be designed to open the door to a partnership. Something, after all, has to be done with the listed building at the heart of the site....

Right now, Chelsea are in a decent position, if not a commanding one. Take everything you read in the media with a large dose of salt until the club announce that they are out of the game. As soon as they are out of it, we are sure they will tell us.

And then there is Earl's Court....for another time perhaps.