The company's management, backed by investment houses West Coast Capital and HBOS, will run the retail property group under the name of Dundonald.
Grantchester has seen its market value shrink in the past two years after returning £200 million from property sales to shareholders. Chairman Nick Hewson said the lack of property coming onto the market means the group is "in danger of dropping off the radar screen" in the City.
He added: "At the end of the day if you are going to repay cash to shareholders rather than reinvesting it you are going to get smaller and smaller. Is it then better to offer shareholders something at a significant premium or just carry on and see what happens? We decided to give them a choice."
Hewson also blamed the government's restrictive planning policies for the decision. The policies have made it increasingly difficult for Grantchester to get consents for new retail warehouse parks or to redevelop existing ones.
Shareholders are being offered 218p-per-share in cash, a premium of 6.3% to the net asset value of Grantchester's 18 retail parks. Grantchester's independent directors have recommended the bid, which follows an earlier attempt by senior management to secure a buy-out in February.
The group also revealed today a third party had recently made an "unsolicited approach" but the talks had failed to move beyond the preliminary stage.
Hewson and his management team will take a 25% stake in Dundonald. Finance director Paul Huberman is stepping down but will take up a consultancy role. West Coast Capital and HBOS will together own 75% of the new business through their respective TBH and Uberior subsidiaries.
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