MANAGEMENT frustration at the low rating of their shares during 2000 has led to an explosion in the value of public to private transactions, according to figures just released by the Centre for Management Buy-Out Research (CMBOR).

The research, sponsored by Deloitte & Touche Corporate Finance and Barclays Private Equity, found that the public to private market has grown from seven transactions, worth £0.4 billion, in 1997 to 44 worth £9 billion in 2000, almost double the value reached in 1999. The value of the total buy-out market for 2000 is £21.5 billion, an increase of over 25 per cent on 1999.

Public to private deals account for almost 44 per cent of the value of the total buy-out market in 2000, with the property sector dominating - eight deals were completed worth a total of £4 billion.

A number of additional deals have been announced, but not yet completed, including the £0.5 billion buy-out of Burford.

Stuart Lindsay, corporate finance partner at Deloitte's Southampton office, said: "Five of the top ten buy-outs this year are public to private transactions.

"Currently there are still around 80 property companies that are listed, and the private equity houses are falling over each other to grab the next deal. The discount to net asset value which the stock market places on property companies provides opportunities to buy assets cheaply even after offering a bid premium.

"The ability to increase gearing off market improves returns for those willing to take on exposure to the property sector and able to structure, what have proved to date to be, relatively complex transactions."

Other key findings include:

Mega deal flow continues to dominate the sector - 14 public to private deals of greater than £100 million have been completed.

The buy-out of the property company MEPC becomes the biggest buy-out ever recorded at £3.5 billion.

The average P/E ratios calculated for public to private deals are lower than those for all buy-outs.