UPDATE 1-Property consultant Savills to buy US firm for up to $260 mln

Thu May 1, 2014 8:56am EDT

* To buy unlisted Studley Inc

* To pay initial consideration of up to $130 mln

* To issue promissory notes worth up to $130 mln

* Shares fall 2 pct (Adds details from statement, background, share movement)

May 1 (Reuters) - British property consultant Savills Plc said it would buy U.S.-based commercial real estate services firm Studley Inc for up to $260 million to expand in North America.

Savills said it would pay an initial consideration of up to $130 million in cash and shares. It will also issue promissory notes worth up to $130 million - with $60 million being paid a year after the deal closes and $70 million two years after that.

The FTSE-250 company said it expected to seal the deal by May 30, following which it would rebrand its U.S. arm as Savills Studley.

The United States is Savills smallest market and accounted for just under 1 percent of its 904.8 million pounds ($1.53 billion) revenue last year. The company has larger operations in the UK, Asia Pacific and across Europe.

Studley, which specializes in tenant representation, reported a pretax profit of $6 million and revenue of $233 million in 2013.

Savills said the deal would add to its underlying earnings per share in the first year.

Shares in Savills were down 2 percent at 591.3 pence at 1241 GMT on the London Stock Exchange on Thursday. ($1 = 0.5922 British Pounds) (Reporting by Esha Vaish in Bangalore; Editing by Joyjeet Das)

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