Longstanding UK property company Daejan goes private

One of the oldest property companies in the FTSE 250 is to be taken private by its largest shareholder, the Freshwater family, after years of criticism for poor corporate governance.

Daejan Holdings, the only company on the main market that has resisted calls to bring women on to its board, on Friday said it had agreed to a £1.3bn takeover.

The Freshwater family are using a related company called Centremanor to carry out the deal, which values each share at £80.50 — a 58 per cent premium to the average price over the past six months. The offer is significantly less than the company’s net asset value of £119.85 per share.

Daejan has been repeatedly criticised for never having had a woman on its board, and for failing to engage with shareholders over such concerns.

In the past, a spokesperson has been reported as saying there would be difficulties in appointing women to the board because of the Freshwater family’s strict Orthodox Jewish beliefs.

Freshwater already owns 79 per cent of Daejan. Benzion Freshwater, whose father built the company’s property portfolio in the 1950s, is the longest serving director in the FTSE 350.

He has been a director of the board since 1971, and chairman of the group since 1980. He is also chief executive, which has led to proxy advisers — who give guidance to investors on how to vote at annual meetings — urging shareholders to remove him from the board.

Mr Freshwater, also a director of Centremanor, said: “Daejan has not issued any further shares since flotation in 1959 and . . . the Freshwater Group does not believe that it will offer any of its shares for sale in the future, meaning there is no possibility of a successful third-party offer for Daejan emerging.”

Rothschild is advising the Freshwater Group and Lazard is advising the independent Daejan director.

Paul Mumford, fund manager at Cavendish Asset Management, who has been a shareholder in Daejan since 1988, said he was disappointed the offer was below the company’s net asset value. But he added the low level of liquidity in the shares “makes this a reasonable price”. Shares in Daejan rose 55 per cent to £80.20 on Friday.

Daejan is one of the oldest listed property companies, founded originally to acquire plantation businesses in the Dutch East Indies in the 1930s. After these were occupied or destroyed in the second world war, it became a listed shell company used by Benzion Freshwater’s father for his growing property portfolio in the 1950s.


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