Foster + Partners’ estimated price falls to £300m

Concern about continuing involvement of Lord Foster knocks up to £200 from likely price

The price tag for Lord Foster’s practice is likely to drop to £300m, from initial estimates of between £390 and £500m.

A
senior source close to the bidding process said one of the four private
equity firms considering a bid for the practice withdrew early this
week, citing fears over price and risk.

The source said: “There
were a variety of reasons. The price was too high, and is Norman Foster
going to stay around? One valuation of £500m has been quoted, but
they’d accept £300m.”

Much of the perceived value of the business is derived from the personal involvement of Foster.

If he decided to leave, the firm is certain to lose some of its caché.

It
is understood that the bidder that dropped out is based in the UK. The
remaining three will battle it out for the practice until a sale is
completed, probably by the end of next month.

The bidders, who met Foster and his senior management team earlier in the month, are preparing a second round of bids.

Foster has put his penthouse above the practice’s Battersea headquarters up for sale.

It
is understood that Foster has been considering the sale of the
40-year-old practice for more than 12 months, and has appointed
Catalyst Corporate Finance to handle the transaction. He has also
considered a flotation on the stock exchange.

Despite the high
price tag the company made a loss in 2004. Foster responded by cutting
overheads and driving up turnover, although he also spent £500,000 on
rebranding.