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Merlin Completes Its €1,000M Capital Increase

7 August 2015 – Expansión

Demand for the Socimi’s capital increase exceeded supply by 8 times.

The Socimi Merlin Properties has successfully completed a capital increase amounting to €1,033.7 million – the company intends to use the funds to finance its purchase of Testa, the real estate subsidiary of Sacyr.

According to a statement issued by Merlin to Spain’s National Securities Market Commission (CNMV), 129.21 million shares were subscribed in total, after demand for the capital increase exceeded supply by 8 times, during the preferential subscription period and the period for assigning additional shares.

Merlin launched a takeover bid for 100% of Testa’s share capital on 23 July, after taking a 50.1% stake in the real estate company and acquiring an additional 25% stake in the company from Sacyr for €861 million.

The takeover, which was obligatory, as it exceeded the quota of 50% of the share capital, is effectively aimed at just 581,609 of Testa’s shares, which represent the 0.38% stake of its capital that is listed on the stock exchange.

Merlin is offering these minority shareholders €13.54 per share, the same average price at which the Socimi will acquire 100% of Testa, which is 1.7% higher than the company’s current share price (€13.31 at the close of trading on Wednesday).

The Socimi will thereby exclude Testa from the stock exchange, since it plans to merge the two companies (Merlin and Testa). To do so, it will have to first convert Sacyr’s current subsidiary into a Socimi – that step is expected to be completed before the end of September.

All of this forms part of an agreement that Merlin reached with Sacyr at the start of June, to purchase Testa in several stages over a maximum period of one year, for €1,793 million.

The operation will result in the creation of the largest property company in Spain, with assets worth €5,000 million, including one of the four skyscrapers in the Cuatro Torres business district of Madrid.

Original story: Expansión

Translation: Carmel Drake