News on 17 November 2000
CB Richard Ellis Services, one of the largest commercial
real-estate services firms in the US, has received a proposal from an
investor group led by Blum Capital Partners to purchase the 62% of the
company it doesn't already own for $194.7m. The offer values the company
at $740m including $400m of debt.
The investor group includes Ray Wirta, CB Richard Ellis' Chief Executive
Officer; Brett White, Chairman of the Americas for CB Richard Ellis; Freeman
Spogli & Co.; Fred Malek, a director of the company; and the Koll
Holding Company, which is controlled by Don Koll, also a director of CB
Richard Ellis.
Quoted in the Wall Street Journal Europe Mr. Wirta explained why the investors
and management want to take the company private: "We think we'll
have additional financial flexibility." He said that if the company
needs to make capital investments in new technology, for example, that
would negatively affect short-term earnings, "we won't be concerned
about doing that as a private company."
The proposal is subject to approval by CB Richard Ellis' Board of Directors
and stockholders. A financial adviser has been faxing letters to CB's
institutional shareholders advising them to reject the bid, reports the
WSJE. John Blake-Zuniga, managing director of San Diego-based Vanguard
Capital, a broker and financial adviser that represents clients that own
about 100,000 CB shares, says that "without any question, management
is attempting to acquire the company well below fair valuation."
CB Richard Ellis, with its HQ in Los Angeles, has 250 principal offices
in 37 countries and 10,000 employees worldwide. The firm manages a portfolio
of 40m sq m (422m sq ft) of property in the Americas and 56m sq m (600m
sq ft) worldwide.
www.cbrichardellis.com
