Realia Sells ‘Los Cubos’ Office Building To Therus For €52M

23 October 2017 – Expansión

The real estate company Realia, owned by Inmobiliaria Carso and FCC, which are both controlled by the Mexican businessman Carlos Slim, has sold the office building known as Los Cubos, located in Madrid, for €52 million.

The buyer is the French real estate company Therus, which is co-investing with the British investment group Henderson Park, according to several sources.

The property, which owes its name to its unique architecture, has a leasable area of 18,324 m2 and 334 parking spaces.

The real estate company put this building, located in the vicinity of the M-30 ring road, up for sale at the end of last year, as reported by Expansión at the time. The building has been vacant since the end of 2015. Before its sale, the company considered renovating it on several occasions to improve its appeal in the market.

In the end, Realia has sold the building for €52 million, compared to the initial asking price of €57 million. The sale of Los Cubos is the latest in a long line of high profile real estate investment operations closed in Spain in recent months. The investment volume in the real estate sector during the 9 months to September amounted to €10,300 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

The Fund Polygon Asks Slim To Raise His Bid For Realia

15 March 2016 – Expansión

The British fund Polygon is legally mobilising itself to try to obtain the maximum value from Realia. The fund, which controls an 8.53% stake in Realia through various financing vehicles, considers that the price of €0.80 per share that the Mexican tycoon Carlos Slim is offering in his takeover bid “is clearly a long way from a fair price”. The fund, which is headquartered in London, is demanding at least €1.78 per share, more than double the bid price. In letters to the National Securities Market Commission (CNMV) and the Board of the real estate company, Nicolas Dautigny, one of the Directors of European Investment at Polygon, says that the price of €0.80 per share that Slim is proposing, through Inmobiliaria Carso, “is not fair” and “significantly undervalues the company’s assets”.

The letters, to which Expansión has had access, copy in the law firm Araoz y Rueda Abogados, advisors to Polygon, and thereby begin the legal procedure to demand a higher price for the takeover.

In its letter to the Board of Realia, Polygon urges the governing body to engage an independent investment bank and to look for “alternative buyers” for the company “in order to maximise its value”. “Otherwise, Slim will take control of Realia without paying the fair price”, he adds.

Meanwhile, in its nine-page letter to the CNMV, the fund lists a number of arguments that, in its opinion, justify that the price of the takeover bid should be higher. The first is the net asset value (NAV) per share that the company itself assigns its assets. According to Polygon, the company has set a net asset value of €1.40 per share. That should be the starting point. Polygon says that the takeover bid should be higher than that price because “the value of the assets published by the company is too conservative compared with other companies in the sector in terms of the appreciation of its real estate assets in Spain in 2015”. Specifically, “if we apply the same increase that Colonial saw in its assets during 2015, i.e. 16%, then Realia has a NAV value of €1.78 per share”, explains Polygon.

Serious violation

Polygon warns the CNMV about the financing agreements between Slim and Realia, which are happening in parallel to the takeover, and says that it understands that “the Board’s duty of neutrality has been breached” by Realia, which may constitute a “serious violation” of the Securities Market Act, and it calls upon the CNMV to investigate this matter.

Original story: Expansión (by M. Á.Patiño)

Translation: Carmel Drake

Slim Launches Voluntary Takeover For 100% Of Realia

28 January 2016 – Expansión

The Mexican multi-millionaire Carlos Slim has launched a takeover bid for 100% of the real estate company Realia, in which he already holds a 30.4% stake, at a price of €0.80 per share. The voluntary offer represents a premium of 17.6% with respect to the trading value yesterday, when the share price remained stable (at €0.68/share).

In March last year, after acquiring Bankia’s stake in the real estate company, the Mexican businessman, who is also the majority shareholder of FCC, in which he holds a 27.4% stake, launched a takeover for 100% of the real estate company Realia, at a price of €0.58 per share, for which the Socimi Hispania also made a bid. In turn, FCC holds a 36.9% stake in Realia.

On this occasion, Slim, through his company Inmobiliaria Carso, has decided to formulate his offer on the understanding that a strategic plan will have to be prepared for the Realia group, in order to clean up the company and turn it into a business with a stable level of recurring income, that is balanced with its debt, according to a report submitted to Spain’s National Securities Market Commission (CNMV) yesterday.

On the other hand, by launching a voluntary takeover in this way, Slim avoids the need for the CNMV to set an equitable price, which in all probability could be higher. Carso has been advised by the law firm Ontier.

The Mexican businessman considers, in addition, that by formulating a takeover at an equitable price, a new window of liquidity will be opened for the minority shareholders, which will allow them to take a decision as to whether to continue in the company or sell their stakes. The operation is subject to approval by the CNMV.

On 8 February 2015, the Mexican multi-millionaire advised the CNMV that his stake in Realia exceeded 30%, following the subscription of shares under the framework of the capital increase, which the real estate company launched for €87 million.

At the time, he announced that he was going to request a waiver from the obligation to launch a takeover for 100% of the company, although in the end, he has decided to submit a voluntary takeover bid.

Nevertheless, and despite having exceeded the 30% stake in the company’s share capital, which requires the launch of a takeover for 100% of the company, Slim believes that the criteria for the aforementioned waiver apply in this case.

He says that he has not appointed the majority of the Board members or of the Executive Committee, he has not exercised any of the voting rights that apply to holders of stakes of more than 30% in Realia. Furthermore, none of the events established in Article 5 of the takeover law that would attribute additional voting rights in Realia to his company, have taken place, besides those already mentioned.

The Mexican businessman ranked in second place on the Forbes list of the richest people in the world.

Original story: Expansión (by M. Anglés)

Translation: Carmel Drake

Slim Appoints Trusted Advisor As Realia’s Non-Exec Chairman

7 October 2015 – Cinco Días

The tycoon Carlos Slim is starting to introduce his own people into the real estate company Realia. Yesterday, he appointed two new members to the Board of Directors, including Juan Rodríguez Torres, who will serve as the non-executive Chairman.

Slim controls the property company, which was founded in 2000 with assets from Bankia and FCC, through his company Inmobiliaria Carso.

He took control after purchasing a 24.9% stake in the share capital from Bankia at the beginning of this year. Moreover, he indirectly controls 36.88% of Realia’s capital through his majority shareholding in FCC.

The new Chairman is a man who Slim trusts completely. The two men are the same age (75) and both studied Civil Engineering at the Universidad Nacional Autónoma de México. They have also served together as directors on the boards of several companies owned by Slim, the second richest man in the world, according to Forbes. Rodríguez takes over from Ignacio Bayón, who has held the post since Realia was constituted and who is now retiring.

Several other changes were communicated to the CNMV, including the resignation of Iñigo Aldaz, the CEO – Slim has not yet revealed who will take over his role.

Realia is restructuring its Board of Directors after Slim won the takeover war that was waged with Hispania, in which George Soros holds a stake, to take over the control of the real estate company in June.

The company also appointed the Mexican CEO of FCC, Carlos Jarque, as a member of the Board of Directors of the construction company.

Moreover, Alicia Alcocer Koplowitz and Esther Alcocer Koplowitz will continue as members of the Board, in their capacity as representatives of FCC. Meanwhile, Gerardo Kuri, Slim’s key man at Cementos Portland, also controlled by the tycoon, will enter as a shareholder-director.

Improvement in Realia’s asset value

Meanwhile, the company also reported that it has established a new accounting policy whereby the valuation of its assets would have increased from €912 million as at 31 December 2014, when they were valued at acquisition cost, to a fair value of €1,399 million. “The impact of this measure on the company’s own funds, at the consolidated level, would have been an increase of approximately €367 million”, said a source at the company.

According to Realia, through this decision, the company is bringing itself in line with the standard practices of the main listed real estate companies in Spain. They are also improving the transparency of the communication of the company’s value to the market, since the fair value method, endorsed by an independent expert, more adequately reflects the value of the assets of real estate companies.

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Bankia Sells Its 24.9% Stake In Realia To Slim For €44.5M

5 June 2015 – Cinco Días

The Tax Authorities approve Bankia’s sale of its 24.5% stake in the real estate company for €44.5 million, as the Mexican magnate’s takeover bid for the company gathers strength.

On Tuesday, the Tax Authorities approved the sale of Bankia‘s 24.5% stake. The bank required this approval, since it is controlled by the Fund for the Orderly Restructuring of the Banking Sector (the FROB), to execute the transfer of its shares to Inmobiliaria Carso, the property development company owned by Carlos Slim.

As a result, the Mexican magnate now holds 61.3% of Realia, since he indirectly controls the 36.8% stake owned by FCC. Slim is, in turn, the main shareholder of the construction company. The sale paves the way for the second richest man in the world to take ownership of 100% of the Madrilenian real estate company.

The transaction has been closed for €44.5 million, which represents net profits of €9.6 million for Bankia, according to reports submitted by the entity to the CNMV.

There are currently two takeover bids underway for Realia: one from the Socimi Hispania and the other from Slim himself, to take control of 100% of the company.

Hispania submitted the first bid, at a price of €0.49 per share. In March, the Board of Directors of the real estate company rejected that offer from the Socimi, in which George Soros holds a stake, which valued the company at €150.61 million, since it believed that the consideration offered was unreasonable. Moreover, the Socimi conditioned its offer on controlling at least 55% of Realia, which means that its road is now closed.

Meanwhile, the Mexican firm takes control of this stake whilst it waits for the CNMV to approve the takeover that it launched in March, at a price of €0.58 per share. Once this transaction has been authorised, an acceptance period for the two bids will begin.

Slim expressed his interest in the real estate company soon after he became the primary shareholder of FCC at the end of 2014. At that time, the construction company suspended the sales process that it had opened for its 36.8% stake in Realia; a representative of the magnate sits on that company’s board.

In his takeover statement, Slim revealed that his goal is to take control of Realia and clean it up in order to “fully develop the opportunities that it has within its reach, as a leading company in the sector”, which will continue to trade on the stock exchange. Realia refinanced debt amounting to €792 million, relating to its development activity at the end of 2013, whereby extending the repayment period to June 2016.

Original story: Cinco Días (by A. Simón)

Translation: Carmel Drake

Bankia Will Get Best Price For Its Stake In Realia Regardless Of Who Wins Bid

9 March 2015 – Expansión

Battle for the real estate company / Slim has committed to pay Bankia the difference between the price agreed for the purchase of its 24.9% stake and the eventual winning bid.

Bankia will win regardless (of who turns out to be the evenutal victor) in the takeover war being waged by Carlos Slim and the Socimi Hispania Real for Realia. The financial institution, a historical shareholder in the real estate company, together with FCC, will obtain the same profit as the other shareholders, despite having sold its stake to the Mexican tycoon last Wednesday.

According to information submitted by Inmobiliaria Carso to the CNMV, the company controlled by Slim has guaranteed Bankia a payment to cover the difference, if the evenutal successful offer (price) for Realia is higher than the amount received by the bank.

The entity chaired by José Ignacio Goirigolzarri sold Slim the 24.95% stake that it held in Realia for €0.58 per share, and therefore it received €44.48 million. The offer exceeded the only firm acquisition proposal made up until that point by 18%, which had been submitted by the Socimi Hispania; its offer for 100% of Realia amounted to €0.49 per share.

Both proposals fell significantly below the average trading price of Realia’s shares on the stock exchange. On Friday, after Expansión published that Slim was negotiating an agreement with Hispania to take control of the real estate company, its share price decreased by 3.33% to €0.725, bringing its market capitalisation to €222.8 million.

Hispania’s takeover bid values Realia at just over €150 million, compared with Slim’s offer, which places a value of €178 million on the company.

Both takeover bids are voluntary in nature. Nevertheless, the CNMV may force both candidates to improve their respective offers and bring them closer to the average share (trading) price recorded in recent months. That happened in the case of Deoleo, when the regulator forced the venture capital fund CVC to increase its offer from €0.38/share for the oil group to €0.395/share. On that occasion, the fund also extended the higher bid price to the financial institutions from which it had previously purchased shares in Deoleo.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Slim Buys Bankia’s Realia Stake, To Make Bid For Whole Company

5 March 2015 – Bloomberg

Inmobiliaria Carso, a holding company owned by Mexican billionaire Carlos Slim, agreed to buy Bankia SA’s stake in Realia Business SA and make a bid for the whole company as he increases his investment in Spain.

Carso will pay 0.58 euros per share, or 44.5 million euros ($49.3 million), to buy Bankia’s 24.95 percent stake in the Spanish developer and has committed to bid for the whole company at the same price within nine months, the bank said in a filing to regulators in Madrid today. Realia shares closed today at 86 cents.

Slim, the world’s third-richest man, last November agreed to become the biggest shareholder in Fomento de Construcciones & Contratas SA (FCC), which is also Realia’s shareholder, as the construction company sought to cut debt. Slim is one of several high-profile investors, including George Soros, who are investing in Spanish companies, as they bet that growth will pick up pace as the country emerges from its property crash.

Hispania Activos Inmobilarios SA, a Spanish real estate investment trust, last November said it would offer 0.49 euros per share for Realia. FCC owns about 37 percent of Realia, according to regulatory filings.

Bankia, Spain’s fourth-biggest bank, has to sell off its industrial equity stakes as part of the terms of its rescue with European funds in 2012 after losses on real estate pushed it to the verge of collapse.

Original story: Bloomberg (by Charles Penty)

Edited by: Carmel Drake