London – Another one bites the dust?

London based property developer, MInerva, lost more than half it's already reduced value on Friday after the Dubai government withdrew its takeover offer. The offer was made through a wholly-owned government subsidiary, Limitless. Limitless made an offer of 160p a share for the company before the summer, but talks broke down on Thursday night after an agreement could not be reached

The lenders were said to be seeking assurances on a number of issues including cash and management, as well as the terms on debt. In a statement, Limitless blamed that decision on being unable to obtain third-party consents on satisfactory terms and reserves the right to make another offer. The decision has raised questions about the future of the company, which is heavily exposed to the struggling City of London office market through two large, and almost entirely empty, on-site developments. Considering the bid was considerably higher than the share price, one wonders what the lenders are playing at, and the market reacted badly on the news, prices falling 45½p to 35p a share.

Minerva has previously said that it did not require the takeover to carry on, and on Friday its management refused to comment, although Its lack of income and high level of debt has worried investors, who hoped that the Dubai government would have provided the resources to see the company though a difficult period for developers.

Minerva’s schemes are fully funding and the company has some cash reserves of (£117.4m), although there is about £30m of short-term debt relating to its Croydon retail development, which is struggling to find an anchor tenant and unlikely to find one in the current climate. Another one bites the dust? Or will Mr Brown step in with a government handout - Unlikely in this case.