GE Capital Real Estate is leading a financial group that intends to purchase and take private one of Britain's largest commercial land companies.

In a surprise move earlier this year, the board of MEPC PLC, Britain's fourth-largest commercial landlord, agreed to sell out to Leconport Estates, a joint venture formed by GE Capital and BT Pension Scheme (a pension plan for employees of British Telecommunications PLC), for 550 pence a share. The total value of the offer is 1.92 billion pounds ($2.88 billion or 3.07 billion euros). This figure represents a 25 percent premium over the company's pre-announcement share price. Leconport said it intends to retain MEPC's management.

It has been well known in the industry that MEPC management was trying to sell assets in an attempt to boost its stock price, but industry observers said they were taken aback by the company's move to sell in a single swoop. In fact, Jamie Dundas, who became chief executive of MEPC a year ago, said initially that he had something much more modest in mind. But in a statement this past spring, he changed his direction, deciding to explore whether "we could return all the capital to our shareholders in a single step. My job was to produce value for shareholders," he noted. "I think I've done that."

MEPC stock, like many other property companies in the United Kingdom, has been trading at a deep discount to its assets, but its stock revived following news of the sale, jumping up 23 percent.

Despite the stock market's long discounting of the value of MEPC, GE Capital Europe's president, Charles Alexander, noted that he expected to be able to wring more value out of the company by taking it private. "We can manage these assets with far greater flexibility than could be attained by leaving it as a public company," he said.

Even though Leconport is paying a premium to shareholders, analysts see this as a good deal. When measured against the value of MEPC's that cost may actually be considered cheap.

The deal may be the first in a series of additional deals in the United Kingdom real estate sector. Analysts believe that with the share prices of companies in the sector currently at steep discounts to the real estate value of their holdings the circumstances are ripe for more activity.