Goldman Sachs blocks Dubai bid for Spain's Colonial: report

US bank Goldman Sachs, one of the main creditors of Spanish property giant Colonial, is blocking a bid for the troubled company by the Investment Corporation of Dubai, a report said on Wednesday.

All of Colonial's other creditors – Eurohypo, Calyon and the Royal Bank of Scotland – have approved the takeover of Spain's second largest property group by ICD, the Gaceta de Negocios said, quoting industry sources.

Colonial's debt was €8.6 billion (Dh46.5bn) at the end of 2007.

ICD, owned by the government of the booming Gulf emirate, had until Tuesday to present a formal offer for Colonial.

Gaceta said ICD proposed €2.15 per share but Goldman Sachs deemed the offer insufficient.

It said the US bank is in touch with other investment funds that could be interested in buying Colonial.

Colonial, which has a market capitalisation of €2.7bn, has been the focus of takeover speculation since chairman Luis Portillo, one of the company's main shareholders, was ousted in a wide-reaching board reshuffle in December.

Portillo and Spanish realtor Nozar, who together hold over 50 per cent of Colonial, agreed early this month to sell their stakes to ICD if it made a full bid for the company.

Colonial shares have lost more than 50 per cent of their value since the end of 2007 on concerns over the group's debts, falling property sales and the international credit crunch that has cooled the housing market.

US conglomerate General Electric said on February 1 that it was suspending a bid for Colonial because it could not gain access to the company's books.

On the Madrid stock market, Colonial shares were up 2.37 per cent at €1.73 by mid-morning in a market that had dropped 1.31 per cent. On Tuesday, Colonial shares closed down 7.14 per cent at €1.69. (AFP)