Private equity firm TPG is in final negotiations to buy UGL’s property services unit DTZ for about $1.2 billion, the Australian Financial Review said on Monday.
A deal will be announced as early as Tuesday, it said.
The final talks come after UGL ran a sale process for the business, attracting offers from TPG and rival private equity firm Warburg Pincus. US-based Warburg Pincus is believed to have stopped working on the deal after it earlier re-engaged with UGL when the only bid received for DTZ by the May 16 deadline was from TPG Capital. That bid offered almost $300 million less than the $1.3 billion asking price.
TPG and Warburg Pincus were among four groups in the final running to buy DTZ. The others were Ares Management and Onex. But the parties did not lodge a final offer for the company, with problems securing financing being one of the setbacks.
UGL bought British real estate agency DTZ almost three years ago for €77.5m and merged it with its real estate arm. A demerger was flagged almost a year ago, with chief executive Richard Leupen arguing its growth prospects would be stronger as a stand-alone business.
However, the sale process began this year through Goldman Sachs after private equity approaches for DTZ, which contributed the majority of UGL’s $36.5m net profit last financial year.
UBS and JPMorgan advised TPG.