Azora Allies With Fortress & King Street in Bidding For Realia

12/11/2014 – Expansion

The sale process of the 55.95% stake of Realia in hands of FCC and Bankia enters the final stretch with some new players on the horizon. As the news on Torreal eyeing the purchase faded out, another Spanish fund joined the tender of the desirable real estate firm.

Azora, a private equity company established by Concha Osacar and Fernando Gumuzio in 2003, is said to have teamed up with  Fortress and King Street that already bid for Realia together. Both funds have become the main creditors of the firm at the moment of acquisition of 60% of the debt from Sareb and Santander, respectively. In fact, Azora participated in the purchse of €437 million in loans sold to Fortress by the bad bank.

The Spanish fund manager administers the 3.000 houses which Goldman Sachs bought for €201 million in mid-2013 from Ivima, Madrid’s Housing Insititute.

At present, Azora manages a €2.3 billion worth of assets, including subsidized homes for rent, student housing and offices scattered around various European countries. At the beginning of the year, Azora floated a Socimi (Spanish REIT firm) called Hispania with €500 million raised at IPO and support from such big-name investors as George Soros and his Quantum Strategic Partners, John Paulson, Moore Capital, Dutch Pension Fund APG, Cohen & Steers and Canepa. Since its listing on the stock exchange market, Hispania has purchased assets worth €347 million.

The Proposal

At the moment, Fortress and King Street are the only candidates who demonstrated willingness to buy 100% of the stake. The operation would be carried out through a debt-for-equity swap. According to the latest available Realia balance report on the first quarter 2014 received by the National Stock Exchange Commission (or the CNMV), the company’s financial liabilities amassed at €2.11 billion, cut significantly by the sale of the Siic de Paris stake for more than €1 billion.

In turn, Colonial and Torreal would rather vie for Realia Patrimonio, excluding the residential land and housing encompassed by the branch. Only Colonial’s bid has been disclosed, €650 million.

Goldman Sachs, the underwriter, aims at closing the sale by December 31st. The 56% stake put up by builder FCC and Bankia drew attention of many funds like Orion, AEW and Amancio Ortega‘s Pontegadea.

Currently, FCC and Bankia are pondering the three offers. No matter who wins the 56% holding in Realia Business, they will have to submit a takeover bid for the entire company, resulting in its delisting. This way, Realia would follow the suit of another legendary firm, Metrovacesa, whose creditor shareholders excluded it from the stock exchange in May 2013.


Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE