Newcourt, the rapidly expanding outsourcing services group, has announced the details of a £15.2 million (€22 million) takeover offer for Ely Property group, saying it has the full backing of Ely's board. It is the group's seventh acquisition this year and its first foray into the UK market.

The offer values each Ely share at 5.632 pence - a premium of more than 40 per cent on the average share price in the six months prior to the start of the offer period on June 5th.

"This is all very much part of our strategy," said Ted O'Neill, Newcourt's chief executive. Ely is a facilitator for third-level student accommodation, an area that Newcourt is already involved in. "Their position in third-level student accommodation here, and in the UK in particular, is what attracted us to them," he said.

According to Mr O'Neill, following the introduction of new health and safety regulations in the UK, the student accommodation market is expected to grow as students are no longer allowed to stay in makeshift residences.

Dublin-based Ely, which is also involved in residential sale and leaseback, healthcare and property management, will become part of the Newcourt group, but will continue operating under its current management. To fund the acquisition, Newcourt yesterday announced its second placing this year, saying it will raise €9.1 million through the sale of 7.5 million shares, equal to 10 per cent of the issued share capital.

Laurence Davis, chairman of Ely, welcomed the buyout, saying it represented "a fair and reasonable price" for all shareholders. He said the growth in the Ely business to date had been somewhat restricted due to the lack of scale, a situation he believes the Newcourt acquisition can improve.

Ely saw its revenues jump to €4.5 million in the 14 months to the end of December, from €1.4 million in the prior 12-month period. Profits after tax were €1.3 million. Mr Davis attributed the gains to expansion into the UK property market.

The bid already has the approval of the majority of Ely shareholders and is now just subject to a vote by Newcourt shareholders at an extraordinary general meeting next month.

Mr O'Neill said he expects Newcourt to continue on the acquisition trail for the rest of the year, although no others will be on the same scale as Ely. Newcourt operates in five main areas, including recruitment and facilities management.

Shares in Newcourt, which is listed on Dublin's IEX, jumped 7.4 per cent, to close up 9 cent, at €1.30. Meanwhile, AIM-listed Ely slipped 0.5 per cent, to 5.28 pence.