One of St. Modwen Properties PLC (LSE:SMP)'s biggest investors said The Blackstone Group Inc. (NYSE:BX)'s GBP 1.2 billion ($1.7 billion) takeover proposal for the U.K. developer is too low. J O Hambro Capital Management Limited likely wouldn't support a sale of the company at Blackstone's potential bid level of 542 pence per share, it said in response to Bloomberg queries.

The fund manager owns just over 9% of St. Modwen, according to the statement. St.

Modwen's current plans will deliver value “well in excess of the potential offer,” Alex Savvides, a senior fund manager at J O Hambro, said by email. “There are unique strengths to this business and its asset base, built up over many years, that the stock market has in recent years consistently failed to recognize,” said Savvides, who helps run J O Hambro's UK Dynamic Fund. “Our preference would be to work with the existing board to help support, both strategically and financially, the continuation and acceleration of the existing strategy.” St.

Modwen announced earlier on May 7, 2021 it received a non-binding proposal from Blackstone about a potential cash takeover bid. Its board would be willing to unanimously recommend the deal if Blackstone makes a firm offer at the proposed level, St. Modwen said in the statement.

St. Modwen has an “irreplaceable pipeline of further growth opportunities,” Peel Hunt wrote in a note to clients on May 7, 2021. While the offer's 24% premium to net asset value seems attractive, it represents only three years of growth, analysts including James Carswell wrote.

Blackstone has until June 4 to make a binding offer for the company, under the U.K.'s takeover rules. Representatives for Blackstone and St. Modwen declined to comment.