The sale of Catalunya Banc´s real estate agency, in limbo

It must be settled within January / Kennedy Wilson and Varde Partners want to renegotiate aspects of the purchase contract after having purchased the Popular´s real estate agency.

The sale of Catalunya Banc´s real estate to the funds Kennedy Wilson and Varde Partners enters its decisive phase and could take a turn within the next days. According to sources close to the funds consulted by Expansión, the two North American investors are reconsidering aspects of the transaction and have implied in the market that they could withdraw.

Close sources to the agreement believe, however, that these are some of the usual pressure tactics in such important negotiations and that the real estate agency of Catalunya Banc will be sold before the end of January. Thus, the Catalan group will be able to enter this transaction in the accounts of 2013. Even though the agreement was announced in August 2013, the investors have not yet signed any purchase contract but only one of exclusivity in negotiations. Financial sources add that the North American investors would not have to face any type of penalty if the negotiations came to an end and they decided to withdraw.

The agreement reached in August contemplated the payment between 30 and 40 million Euros that could rise up to 60 million, depending on the results, for taking over Catalunya Caixa real estate and its 195 employees and providing its services to the Catalan group for ten years.

The purchase of Aliseda

One of the aspects that modified the negotiating conditions is that since the agreement Kennedy and Varde have closed the purchase of Aliseda´s 51%, the subsidiary of Banco Popular valued at 710 million Euros. This company has almost 300 employees. The funds would add now other 195 employees to this company with the Catalunya Banc´s real estate.

Another issue that has changed since August is the possible start of the auction of the nationalized one. When they agreed to purchase the real estate agency, at that moment Frob seemed to prefer waiting a few years before privatizing the Catalan group. In fact, Frob tried unsuccessfully to sale it a few months before. “This adds uncertainty to the buyer who does not know for whom will manage the assets and if the future owner of Catalunya Bank will decide to cancel the contract” sources close to the funds point out. If so the investors would receive indemnity, as it occurs when bancassurance agreements are broken.

Catalunya Banc and the funds have to decide whether or not closing the transaction before the end of this month, as deadline.

In the extreme case that Kennedy and Varde were to withdraw then negotiations with other funds showing interest would be resumed.

Source: Expansión