SP Setia, Sime acquire Battersea power station for RM2 billion

June 07, 2012

KUALA LUMPUR, June 7 — Property development giants SP Setia Bhd and Sime Darby Property Bhd today won a bid for the iconic Battersea Power Station in London with their £400 million (RM2 billion) offer, beating out contenders such as Tabung Haji and football club owner Roman Abramovich.

Both companies told Bursa Malaysia in a statement today that they had signed an exclusivity agreement with the joint administrators and receivers Alan Bloom and Alan Hudson of Ernst & Young LLP.

"SP Setia and Sime Darby Property have today entered into an Exclusivity Agreement with the Joint Administrators and Receivers, on behalf of the owners of the Property, to acquire the site for £400 million or approximately RM2 billion.  

"SP Setia and Sime Darby Property have a period of up to 28 days to conduct further due diligence and investigations as may be deemed necessary, and to negotiate the contract for the acquisition of the Property on terms and conditions acceptable to the parties. SP Setia and Sime Darby Property were advised by RREEF," it said, referring to the Deutsche Bank’s real estate arm.

The Malaysian Insider had previously reported that SP Setia had approached the Employees Provident Fund (EPF) to revive its takeover bid after its redevelopment plans for the power plant were rejected last year.

Property researchers CoStar had said in its report that state pension fund EPF is expected to join forces with SP Setia, Malaysia’s largest listed property developer by revenue, and RREEF to convert the iconic power plant into a mixed development worth close to RM7 billion.

But EPF told The Malaysian Insider "we are not bidding at all" for the 39-acre site just south of London's financial district.

"We were approached by parties bidding for the Battersea plant but we have made no commitment," its public relations general manager Nik Affendi Jaafar said, but refused to say who had approached the fund which controls assets worth close to RM500 billion.

Bloomberg and the Financial Times had also previously reported that EPF had beat out top-flight football club Chelsea FC for the highly-sought after asset in the British capital.

Chelsea’s Russian owner Roman Abramovich who tabled a bid that would have led to the power station being turned into a 60,000-seat stadium for his club that recently became champions of Europe.

Other bidders included  haj pilgrims fund Tabung Haji, which had announced in April that RM1 billion has been set aside.

The power station, built in the 1930s, was shuttered in 1983 and has featured heavily in UK pop culture, appearing on album artwork for bands such as The Beatles and Pink Floyd.

Despite being the subject of several failed takeover bids, including plans to turn it into a theme park, concert venue and an office development, its prospects took a nosedive in the recent financial meltdown and Treasury Holdings was forced to hand it over after lenders lost faith that it could find a buyer.

But it recently became a highly sought after asset as investors fought over land in and around one of the world’s top financial centres with Malaysian state investment funds dedicating at least RM10 billion to buying up property in London.

In their statement to the Malaysia's main bourse, SP Setia and Sime Darby Property said they planned to develop the coveted property into a "sustainable multi-use real estate regeneration project that will provide economic impetus for the creation of a new vibrant centre for south-west central London".

They added that they will preserve the facade of the historical power plant with its iconic chimney stacks.

The companies said they have also committed to building new underground station as part of the proposed extension of the Northern Line (part of the London Underground’s Tube network) which is to pass by the power plant's site.