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

Carlos Slim Rises To 33.2% His Stake In Realia

14 February 2016 – El Economista

Carlos Slim will increase to 33.2% his stake in Realia on the eve of Initial Public Offering (IPO) the entrepreneur will voluntarily carry out for the 100% of the real estate company.

The Mexican businessman will strengthen his stake above the level of the 30% in the company owner of one of the Kio Towers in Madrid by capitalizing part of a loan of EUR 50 million which Realia had with SAREB and the tycoon bought in December.

Specifically, Slim will exchange EUR 29 million of credit by 14,070,000 million of Realia shares, equivalent to 2.96% of its capital, as he said in his takeover bid.

The transaction is expected to materialize tomorrow Monday, February 15th, thus allowing Slim to increase up to 33.26% his current stake of 30.30% of the real estate company.

Carlos Slim announced it will launch a voluntary bid for 100% of Realia late last January, when it exceeded the threshold of 30% in the company.

The entrepreneur exceeded the percentage that forces to bid due to the underwriting of a capital increase the real estate company carried out to repay debt. Slim – to ensure the operation, took more shares than those corresponding to him by keeping the share surplus.

The same path in FCC

This is similar process to that the Mexican is also likely to follow in FCC group, which in turn, is the first partner of  Realia with 36.8% of the capital.

In the case of FCC, Carlos Slim, the current major shareholder with 27.4%, also guarantees the capital increase of 709 million the construction company has just started.

Thus, in the event that the entrepreneur takes the new FCC shares that will eventually remain as a surplus, he will also exceed the level of 30% in the group and would have to make bid for the100%.

In fact, Slim and Esther Koplowitz recently agreed to lift restrictions to exceed that percentage that had been self-imposed, before the need for FCC to carry out this capital increase to reduce debt and get recapitalized.

Regarding Realia, Mexican entrepreneur has announced a takeover bid in order to implement a strategic plan that allows the real estate company to restructure and achieve a recurring and stable level of revenue.

Original story: El Economista (by Europa Press)

Translation: Aura Ree

Carlos Slim On Verge Of FCC Takeover

13 January 2016 – Expansión

The conditions that Esther Koplowitz and Carlos Slim, the majority shareholders of FCC, agreed on 27 November 2014, to facilitate a €1,000 million capital increase and the refinancing of the business woman’s personal debt, may now become an obstacle that stands in the way of allowing the Mexican investor to guarantee the construction company’s latest capital increase, amounting to €709 million.

Slim has committed to subscribing for all of the new shares (totalling €118.2 million at €6 per share) that are not placed during the preferential subscription period. This guarantee exposes him to the possibility of exceeding the threshold of holding a 30% stake in FCC, which would force him to launch a takeover for 100% of the company.

However, the terms of the shareholder agreement signed with Koplowitz in 2014 prohibits the Mexican investor from exceeding the 30% threshold until the end of 2018. The agreement, which was submitted to the CNMV on 27 November 2014, clearly states that, “the parties agree to not increase their individual stakes in FCC above 29.99% of the share capital (that carry voting rights) for the duration of the lock-up period (four years)”.

Sources close to the company say that the most likely course of action is that both shareholders will agree to modify the shareholders’ agreement to lift or ease the limits to allow an increase in their (permitted) stakes, above all, given that, in less than a month, Slim has increased his shareholding from 25.6% to 27.2%. “He is marking the field of play and launching a clear message to the market ahead of the upcoming capital increase”, say the sources.

Slim is already exposed to an identical situation in Realia, in which he now holds a stake of more than 30% following a €89 million capital increase. He is currently waiting for the CNMV to release him of the obligation to launch a takeover.

Even if the waiver for Realia is accepted by the CNMV, it would not apply in the case of FCC, given that Slim is the majority shareholder and none of the other shareholders in the company have a stake of more than 30%. At market prices, the formulation of a takeover of 100% of FCC may cost Slim around €850 million, if he exceeds the threshold of 30% (excluding the 22.4% stake held by the Kolpowitz family).

Yesterday, trading on the stock exchange closed with a share price of €6.89 for FCC, i.e. 15% above the price set for the capital increase (€6/share). FCC’s €709 million capital increase is the latest measure adopted by Slim to complete the restructuring of his stake. The construction company wants to use the funds to repay some tranche B debt amounting to €450 million. It pays interest of 5% on the loan and it determines the group’s investment policy and shareholder remuneration.

In exchange for this repayment, the creditors must agree to commit to applying a discount of at least 15%. This is the same discount that was applied to the previous restructuring in which FCC refinanced debt worth €4,512 million.

Original story: Expansión (by C.Morán)

Translation: Carmel Drake