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27 March 2018 – El Economista
Testa is starting to go it alone. The Socimi has decided to terminate the management contract that it had with Merlin Properties, which has been in force since 2016. Following the recent incorporation of the new CEO, Wolfgang Beck, the real estate firm considers that it has the structure and staff necessary to carry out the management of its portfolio itself internally. Thus, at the last extraordinary general shareholders’ meeting, a decision was taken to cancel the contract with Merlin, which will receive new shares in Testa by way of compensation.
Specifically, Testa is going to carry out a capital increase amounting to €89 million, which the Socimi led by Ismael Clemente will subscribe to in its entirety, whereby increasing Merlin’s stake in Testa from its current level of 12.7% to 16.9%.
The rental housing Socimi notified Merlin of its decision in January. Until now, it had been receiving annual remuneration of €7.7 million for advisory and management services.
Merlin, which is Testa’s fourth-largest shareholder, behind Santander (38.8%), BBVA (26.9%) and Acciona (21%), already announced, at its results presentation, its intention to divest its position in the Socimi when it makes its stock market debut, a step that it is expected to take place between May and June this year.
Within the framework of procedures to complete prior to its stock market debut, Testa also approved the execution of a counter split of one new share for every 100 existing shares. Thus, it will give its four existing shareholders one new share with a nominal value of €1 each for every 100 shares that they currently own, which have a nominal value of €0.01 each. Moreover, the new shares will be represented by book entries.
With a workforce comprising more than 80 employees, Testa has positioned itself as the largest owner of rental homes in Spain with a portfolio of 10,702 units in less than two years.
It closed its most recent purchase last week after reaching an agreement with the BuildingCenter, the real estate subsidiary of the CaixaBank group, for the acquisition of 1,458 homes for around €228 million.
Original story: El Economista (by Alba Brualla)
Translation: Carmel Drake