Amancio Ortega Offers €490M For Torre Cepsa

28 June 2016 – El Confidencial

Amancio Ortega has entered the bidding, through Pontegadea, to acquire Cepsa’s skyscraper, by placing an offer on the table worth €490 million, according to sources familiar with the operation.

The owner of Inditex is thereby setting himself up to undertake his largest operation in the country to date, in a deal that would rank well above the figure of €400 million that he paid for the iconic Torre Picasso, the building he acquired from Esther Koplowitz almost five years ago.

Then, like now, the businessman approached the operation without the need to request financing from the banks – he has a wealth that differentiates him from the other candidates and enables him to bid slightly below the other interested parties.

In addition to Pontegadea, two other funds have expressed their interest in putting €530 million on the table, according to sources. Clearly, those bids are higher than Ortega’s, but they are linked to certain financial and payment structures that are a long way from offering the guarantees that Pontegadea provides to all vendors.

The hunt

Thanks to his dividend from Inditex, the businessman receives an annual cheque amounting to €1,100 million, which he uses, almost entirely, to acquire properties. This policy has converted Pontegadea into one of the largest real estate owners in Spain, comparable only with the newly created Merlin-Metrovacesa and Colonial.

Nevertheless, the dimensions of this remuneration mean that it is becoming increasingly difficult for the second richest man in the world to find opportunities in Spain. His interests focus on operations with at least eight zeros in the price, and as a result he has multiplied the number of operations undertaken overseas in recent years. (…)

Despite his financial prowess and the increasing challenge of finding desirable properties, Pontegadea remains faithful to its conservative policy and avoids processes that involve increasing the price in the final stretch.

In fact, its offer for Cepsa falls a long way below the €550 million asking price that the Sheik Khadem al Qubaisi hopes to obtain. The Sheik owns the purchase option over the Madrilenian skyscraper and has until September to exercise it if he wants to stop Bankia from taking over the asset once again. (…).

Nevertheless, Pontegadea is remaining firm in its valuation of the building, a figure that, if they end up closing the operation, will be significantly lower than the €558 million paid by the Philippine Group Emperador to acquire Torre Espacio. Nevertheless, according to several experts in the sector, there are important differences between the two operations, not least the higher risk of having OHL as a tenant rather than Cepsa.

The 248 metre tall skyscraper, designed by Norman Foster, has a leasable surface area of 56,000 sqm, spread over 34 floors. The sale has sparked interest from large institutional investors, such as Invesco, AEW, Deka, Hines, Patrizia, Etoile Properties and Axa.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

199