St Modwen falls prey to private equity firm Blackstone in £1.3bn deal

Housebuilder St Modwen falls prey to private equity barons Blackstone in £1.3bn takeover

Another major British company has fallen prey to private equity vultures in the latest case of pandemic plundering.

FTSE 250 housebuilder and property developer St Modwen accepted an improved offer of £1.3billion from US giant Blackstone, the world’s largest private equity firm.

The deal came just days after rival private equity group Clayton Dubilier & Rice swooped on Morrisons with a £5.5billion bid.

Blackstone boss Stephen Schwarzman (pictured with wife Christine) is said to be the 47th richest person in the world worth an estimated £22bn

Blackstone is led by billionaire Stephen Schwarzman, an influential Republican donor who was criticised for briefly serving as chairman of former president Donald Trump’s strategic and policy forum.

The 74-year-old is said to be the 47th richest person in the world worth an estimated £22billion.

The Harvard Business School graduate took home £450million last year alone. St Modwen caught Blackstone’s eye because of its collection of warehouses and huge tracts of land where it can build more.

Ocado and DHL are among St Modwen’s customers.

Blackstone has started to swoop on strategic landowners as warehouses have rocketed in value since Covid hit and online shopping has boomed.

The deal will net the families of St Modwen co-founders Sir Stanley Clarke and Jim Leavesley around £157million. Together they own more than 12 per cent of the company. Clarke’s widow, Lady Hilda, will make £85million.

Clarke, an apprentice plumber and the son of a maid, set up St Modwen in 1966 with Leavesley, his brother-in-law. It joined the stock market 20 years later.

The company has been led by former Centrica executive Sarwjit Sambhi since last November.

Blackstone’s offer has been backed by St Modwen’s board, as well as the founding families and major shareholders Aviva, Aberdeen Standard and JO Hambro.

The approach is the latest in a string of private equity offers for listed British firms this year – and one of more than 120 since coronavirus struck.

The AA and Asda are also among those that have been targeted.

Many of these deals have gone through but plane parts maker Senior bucked the trend this week, refusing an offer from CVC.

Private equity firms have a torrid reputation for buying companies, loading them with debt, breaking them up and selling the parts to the highest bidder – pocketing huge profits in the process.