First Pacific Davies forms alliance with top British property agent
First Pacific Davies, the wholly owned property arm of First Pacific, is to pay GBP17 million (HK$209 million) for a 20 per cent stake in London-listed property agent Savills in what it says will be the first step in its plans to expand globally.
Chief executive David Davies yesterday said that under the deal - the company's first major acquisition in Britain - it will pay GBP1.60 each for the new Savills shares.
Mr Davies said the investment would give First Pacific Davies an opportunity to start developing its property agency and management activities on a comprehensive global basis.
Savills is one of the largest property consultants in London with an operating profit of HK$81.5 million in the 1996-97 financial year, up from $41.7 million previously.
Savills is engaged mainly in property agency and management business.
It is also involved in financial services and direct property investment.
Following the deal, which is conditional upon approval by Savills' shareholders, the property agency and management businesses of First Pacific Davies and Savills will use the joint name FPD Savills on completion of the deal.
First Pacific Davies will also change its name to FPD Savills by the start of 1999.
Mr Davies said the two companies intended to expand their business in Britain and other countries in Europe.
They also plan to gain a foothold in major US cities such as New York, Chicago, San Fransico and Washington.
Mr Davies said First Pacific had built up a leading position in the Asian and Australian marketplaces over the past 16 years or so and it was time to go international.
'If you want to maintain your earnings, you have to globalise,' Mr Davies said, adding that the US expansion was likely to be seen within six to 12 months.
He said the two companies were likely to start up their own company in the US but would consider acquiring existing American agents.
Savills managing director, Aubrey Adams, said the association with First Pacific gave the company the opportunity to become a significant participant in one of the major global groupings.
He said the funds received from First Pacific would be used to expand its existing activities in Britain and to develop its international operations.