21/11/2014 – Expansion, Cinco Dias
As reported yesterday, listed arm of Azora, Hispania Activos Inmobiliarios, is going to submit a takeover bid for 100% of Realia Business, offering €0.49 per share, a 50% discount on the current price on the stock exchange market. The proposal has pulled down the price by more than 30%.
FCC and Bankia hold 36.88% and 24.953% stakes respectively. Just yesterday, the news rolled over Spain that Azora, Fortress and King Street were giving the finishing touch to their 100% bid.
Hispania, held by such prominent, world-wide known investors as George Soros and John Paulson, admitted it was ‘pondering submitting a proposal for the entire Realia Business’.
The group would present the offer just after acquiring the 60% stake held jointly by Bankia and FCC. The share volume will oblige Azora to take the company over as the stake doubles legally established 30% minimum.
Although Hispania has not specified the amount, it said it was ‘considering a price of 0.49 euros a share’. If the Socimi (Spanish real estate investment trust) pays as much as it suggests, it would mean a 50% slash on the present €1.055 trading value. With the 26% depreciation, Realia’s stock exchange value dropped overnight from €324 million to current €239.75 million.
The takeover bid will be accepted if two requirements met: firstly, the it shall represent at least 55% of the current share capital of Realia. And secondly, it shall include exemption of determined restrictions and limitations included in the Management Agreement between Hispania and Azora.
Hispania also admitted it is currently in talks with creditors of Realia, negotiating on a long-term sindicate financing contract signed with the firm on September 30th, 2009. If the takeover bid approved, Hispania would carry out a capital increase, granting the pre-emtive right to the shareholders. The extension would be equal to the amount pending refinancing.
Except for FCC and Bankia, the main stakeholders of Realia are: another property manager Lualca owning a 5.02% share and Grupo Prasa with its 5.004%.
While because of the news Realia dipped down on the stock, Hispania appreciated by 0.18%. The Socimi went public on 14th March earlier this year at a price of €10.50 a share, by 5.4% more than the €9.932 registered yesterday.
Since then, the vehicle led by Rafael Miranda (pictured) has spent €372 million on properties in Spain, mainly office buildings (precisely 17, investing €223.8 million in them), hotels (e.g. the Guadalmina in Marbella and two NH establishments), as well as 399 dwellingss (200 in Barcelona and 199 in Madrid). Hispania has got €538.2 million in funds.
Assets at Stake
Realia Business owns a real estate branch with 419.000 square meters under management, including office buildings (243.000 square meters) and several shopping malls. To give an accurate example, one of the iconic angled Torres Kio towers at the Plaza de Madrid square in the capital, as well as the Torre Realia BCN in Barcelona. However, the company also possesses disposable business of housing development and land, totalling at 1.9 million square meters and 700 apartments.
Translation: AURA REE