Foster sells minority stake

A minority stake in architect Foster + Partners was set to be sold to private equity firm 3i this week for about £350m.

A source close to the deal said it was expected to be signed off yesterday or today, and that the new investor would not have a controlling stake in the business. The source said: “This is not a sale – it is an investment of less than 50%.”

Senior staff are expected to be offered an option to buy shares once the deal has gone through. Previously, Lord Foster owned more than 90% of the firm’s equity.

The news comes after months of speculation over the sale of a stake in the 850-strong practice.

The price tag will come as a shock to many in the industry, who considered the practice overvalued when it first came to the market.

The revelation in January that Foster had appointed a corporate finance house to look for outside investment in his 40-year-old practice came as a shock to the industry, including many of his 850 employees.

A spokesperson for the firm said the sale would aid succession planning and ensure funds for international expansion.

One source close to Fosters said that many senior people at the practice has been angry at the revelation “but that seems to have been redressed now”.

Earlier this year, Foster unwound an employee share trust and bought back his employees’ 49.6% stake in the firm. Workers were offered a payout, thought to be worth about one month’s salary, but many claim they were not aware of the existence of the trust in the first place.

As a result of this, the financial services regulator in Jersey, where the employee trust was registered, is looking into the case. Building understands that some staff have also approached a lobby group protecting employees’ ownership rights.