Bondholders to boot out Brixton board

TROUBLED property group Brixton will today face an angry backlash from bondholders who want to oust the firm’s top executives, in an attempt to derail takeover talks with arch-rival Segro.

It is understood that Segro is in the final stages of agreeing a much lower than expected takeover bid for Brixton, that will value its industrial property rival at significantly less than its £170m market capitalisation.

Bond holders have reacted furiously to the plans, fearing that the takeover will dramatically dilute their investments.

It is believed one major UK bondholder will today propose at the firm’s annual meeting the appointment of a new executive team to work on debt restructuring and a delay in asset disposals until the property market recovers.

Brixton slumped to a loss of £768.8m in 2008, compared with a profit of £58.2m the previous year, as the value of its warehouse portfolio collapsed, costing former chief executive Tim Wheeler his job.

However, the property group desperately needs to raise funds to pay down net debts of £862m and Peter Dawson, the company’s current chief executive, said last month that Brixton was looking at options including a debt restructuring, equity raising or asset disposals.

Segro is believed to have already asked bankers to begin work on a £300m rights issue – its second this year – that would enable it to pay down £485m of Brixton’s debt, which matures next year.