EUROPE - Beleaguered real estate company DTZ has named Australian real estate service provider UGL as its preferred bidder.
After talks with BNP Paribas over a potential takeover fell through in mid-October, DTZ conceded earlier this week that its shares might in fact be of "minimal value" and that it was still looking for a buyer.
DTZ announced that it has selected UGL - a "leader in corporate real estate advisory, integrated facilities management and project management services - as its preferred bidder.
UGL has not issued a statement on the selection yet and has until 6 December to confirm whether it plans to make an offer.
The company's current market cap is AUD2.1bn (€1.6bn), and its total revenues are AUD4.6bn.
DTZ said the potential combination of itself and UGL could "create one of the world's largest real estate services operations".
However, it reiterated its earlier statement that, given the level of debt within DTZ, there is "minimal value, if any, that may be attributed to the ordinary shares of DTZ".
Meanwhile, DTZ Research issued a paper on the global debt funding gap having implications on loan portfolio sales and non-bank lenders stepping in to provide loans.
While the global funding gap decreased significantly, by 74% through Japan extending loans and increasing amortisations, the gap increased by 4% in Europe.
DTZ estimates there to be enough equity around to fill the funding gap and has already seen increased interest by institutional investors and SWFs, with loan portfolios coming to the European market having attracted "discounts in the region of 20-30%," said Nigel Almond, associate director of forecasting and strategy.
He added: "As the pressure on banks to shrink their balance sheets manifests itself further, we expect this trend to continue."
With banks out of the picture for many loans, DTZ also sees "growing interest from non-bank lenders stepping in to provide additional lending capacity".
