13 November 2017 – Inmodiario
Colonial has acquired an additional 13.3% stake in the share capital of Axiare from some of the company’s former key shareholders, including 9% from Pelham Capital. Moreover, it has formulated a voluntary takeover bid for the remaining 71.4% stake in “Axiare Patrimonio Socimi, S.A.”. The consideration on offer consists of a cash price of €18.50 per share and is subject to Colonial acquiring a stake that represents no less than 50% plus one share of the total share capital of Axiare.
Colonial, which first acquired shares in Axiare just over a year ago with the purchase of 15% of the company’s shares, plans to close the operation during the first half of 2018. The offer price represents a premium of 13% above Axiare’s current share price and 21% above the most recent NAV reported in June 2017.
A Spanish giant worth €10,000 million
With this operation, Colonial would consolidate is position as one of the leading European platforms in the prime office market in Paris, Madrid and Barcelona. Axiare’s portfolio, comprising 74% offices and with 77% of the portfolio located in Madrid, clearly complements the strategy to develop the location and characteristics of Colonial’s asset portfolio.
“This operation continues Colonial’s path of growth and consolidates its leadership position as one of the leading European real estate companies with a great capacity to generate real estate value”, explains Juan José Brugera (pictured above, right), President of Colonial.
The acquisition of Axiare would allow the entity to add €1,710 million in value to its existing portfolio, whereby taking the total asset value to €10,000 million. The resulting portfolio would span an operating surface area of 1.7 million m2, plus 330,000 m2 under development. Colonial, which currently holds a portfolio comprising solely office buildings, 75% of which are situated in prime locations and 97% of which are occupied, would whereby accelerate its commitment to the market in Madrid, where the entity would have a portfolio of office buildings worth €2,600 million.
Following the operation, the exposure to Spain, which currently accounts for 31% of Colonial’s asset value, would increase to represent 42% of the total. The entity’s combined portfolio would have 58% of its value located in Paris, whilst the office portfolio in Madrid and the portfolio of assets in Barcelona would represent 27% and 10%, respectively.
Seizing the optimal moment in the market
Combined, the two portfolios would generate forecast turnover of €350 million, based on the current asset base in each case. Plus, revenues from the potential to generate future income from the various value-added and renovation projects underway by both companies would also have to be added to that figure. Those projects are mainly focused on the market in Madrid and could increase the combined entity’s forecast rental income to €470 million (…).
Full financial backing
The operation is being financed in its entirety by JP Morgan through a bridge loan, which includes capital underwriting (…).
Ramón y Cajal are Colonial’s legal advisors.
Original story: Inmodiario
Translation: Carmel Drake