17 April 2018 – Expansión
Hispania is moving ahead and accelerating the search for a white knight to increase the bid for the Socimi. The real estate firm, which specialises in hotels, has engaged Goldman Sachs, UBS and JPMorgan, as financial advisors, and the law firms Freshfields and Uría Menéndez, as legal advisors, to look for alternatives to the takeover bid presented by Blackstone, which values 100% of Hispania at €1,905 million.
The US fund, which already controls 16.56% of Hispania, after it acquired the stake of the Hungarian-born magnate George Soros, announced its intention on 5 April to launch a takeover bid for the entire company at a price of €17.45 per share, which it would pay entirely in cash. The operation is conditioned on achieving the acceptance of at least 54,584,772 shares, which would allow Blackstone to take control of more than 50% of the total share capital. The US fund must submit its takeover prospectus to the CNMV before 4 May 2018.
“Neither the Board of Directors of Hispania nor its management company, Azora Gestión, were aware of the aforementioned acquisition of shares by Bidco (a Luxembourg-based company controlled by Blackstone through which the operation would be carried out) or of its intention to formulate a takeover bid. As a result, it is an unsolicited offer”, confirmed the company yesterday in a statement sent to the CNMV.
Hispania also said that the Board of Directors will promote alternatives that “maximise” the value of the company. Blackstone has not been the only international fund to express interest in Hispania’s hotels. In this way, before Blackstone launched its bid for Hispania, five other investors expressed their interest in the Socimi without formalising firm offers, according to market sources speaking to Expansión.
Hispania is currently the largest hotel owner in Spain by number of rooms, with more than 13,100 rooms in 46 hotels and a gross value of €1,639 million (66% of its portfolio), and its purchase would represent a significant move that would place the buyer in a position of leadership at a time of strength in the tourism sector.
The manager’s roadmap
Until Blackstone’s takeover bid was announced, Azora’s roadmap involved: selling Hispania’s offices in a single transaction, an operation that had already been channelled towards the fund Tristan; selling the homes in a block deal; and expanding the hotel portfolio to also sell it as a block. Thus, Azora was planning to sell the whole company – without the offices or homes – with a transfer of control that would allow the continuity of the Socimi, before March 2020, when the entity marks its sixth birthday.
Hispania’s shares closed trading on the stock exchange yesterday up by 1.56% to €17.62 per share, in other words, 1% higher than the price offered by Blackstone.
Besides Blackstone, Hispania’s other main shareholders include Tamerlane, with a 5.99% stake, Fidelity (4.88%), BlackRock (4.02%), BW Gestao de Investimentos (3.64%), Axa (3.03%) and Bank of Montreal (3.01%). The US fund has already approached the company’s other shareholders to convey the benefits of the takeover.
The US fund’s offer for Hispania comes two months after Colonial successfully closed its takeover of Axiare. The Board of Directors of Axiare was also reluctant to accept the offer from its rival initially, however, in the end, it expressed a “favourable” opinion regarding the takeover.
Sources at Hispania affirm that the Board of Directors, with the assistance of the financial and legal advisors contracted, will pronounce on the takeover “in due course”. Hispania’s most senior executive body is chaired by Rafael Miranda, who was the CEO of Endesa until the energy company was taken over by the Italian group Enel. Meanwhile, Concha Osácar and Fernando Gumuzio, founding partners and directors of Azora Capital, are external directors.
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake