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What is Gordon up to?

Posted On Monday, 29 April 2002 10:01 Published by
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Donny Gordon is not your average investor, yet his continued buying of Liberty International shares is curious
DOES anyone at the age of 71 start making new long-term investments? Donny Gordon is not your average investor, yet his continued buying of Liberty International shares is curious.

Gordon and his family have been buying small parcels of Liberty International shares for the past two years, to the extent that they now own about 18% of the shares in issue.

Not for the first time, Gordon has made an astute investment. The share price has risen constantly for the past two years in pound terms off a base of about £4,80 and is now about £5,90.

But, after this impressive rise, is there more value to be had.

Liberty International has taken its foot off the accelerator over the past year, though several new projects are in the pipeline for next year. The current triple-net net asset value (the value of the assets after costs of cashing up are discounted) is about £6,10, just over the price at which the share is trading.

Could Gordon be extending his buying spree for reasons other than that he sees more value to be had out of the share? Given the danger that interest rates might rise in the UK, it does not seem impossible that the bears could take hold of the share.

Clearly Gordon, who started Liberty International about 20 years ago, is fond of the company.

It is highly improbable that Gordon hopes to take the company private, despite the fact that several smaller property companies in the UK have been bought out by private equity funds.

Liberty International is just too big, even for the man reputedly the 50th richest in the UK.

It is not impossible that larger UK property companies are sniffing around Liberty International again. But little has changed to make a bid more likely to succeed this time than when British Land made its bid at £5,50.

The share price is now higher than that, so this is a remote possibility. The share price of British Land has increased loosely in tandem with that of Liberty International, reflecting the defensiveness of property stocks in troubled times. The question remains whether Gordon is also buying for defensive reasons.

Business Day

Publisher: Business Day
Source: Business Day
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