Tag: offer

NH Rejects Barceló’s Offer But is Willing to Consider Other Proposals

11 January 2018 – Expansión

Yesterday, the Board of Directors of the NH Hotel Group revealed its position regarding the proposal made by Barceló to merge the two businesses. And, although it expressed its “unanimous” rejection of the offer, it did say it was willing to consider future “strategic opportunities” within the framework of “the consolidation trends that are prevailing in the sector”.

“The Board has carefully considered the fact that the proposed structure – a merger – would not allow for the creation of value for our shareholders over and above that already forecast for NH operating independently”. In its analysis, the Board does not consider appropriate “either the intrinsic value assigned to NH by the Barceló Group’s offer, or its scope or the exchange ratio offered”, according to the explanation presented to the CNMV.

The Co-President of Barceló, Simón Pedro Barceló, sent a letter addressed to NH’s Board of Directors in November, proposing the integration of the two groups to create a “national champion” with more than 600 hotels and 110,000 rooms around the world, as Expansión revealed on 20 November.

The Mallorcan group proposed taking control of 60% of the resultant (merged) company and for the remaining 40% to end up in the hands of the shareholders of the NH Hotel Group. It also set the price of the latter at €7.08 per share, which meant valuing the company at €2.48 billion.

Exchange ratio

For NH’s most senior governing body, which met yesterday for the second time to analyse the proposal made by its competitor, the exchange ratio proposed by Barceló does not reflect the relative valuation of the two companies, nor does it incorporate a control premium over NH’s share value or take into account the potential appreciation in the firm’s share price operating independently. Moreover, NH’s directors emphasised that the offer does not open a window of liquidity for its shareholders. The offer – which is non-binding and conditional upon a due diligence (detailed analysis) – proposes an integration with NH Hotel in exchange for shares issued by the latter, with the resultant company being listed. This operation, therefore, would effectively allow Barceló – which is owned by the third generation of the family of the same name – to debut on the stock market.

“The Board has valued very negatively the fact that the offer from Grupo Barceló lacks liquidity for NH’s shareholders”, reiterated the Board of the listed company.

NH’s Board of Directors includes Alfredo Fernández Agras, representative of Oceanwood (with 12% of NH’s share capital); José Antonio Castro and Jordi Ferrer Graupera, both representatives of Hesperia, with a 9.1% stake; and Ramón Aragonés, CEO of NH. By contrast, HNA does not have a presence on the Board, despite being the majority shareholder, with a 29.5% stake. The Chinese giant was expelled (from the Board) in June 2016 due to a conflict of interest after it signed a purchase agreement with Carlson Rezidor, which competes with the Spanish firm in certain European countries.

Sources at Barceló expressed their respect regarding NH’s decision, although they acknowledged that the position adopted by their rival left them with “a bitter taste since they had not been able to convince the Board of the good intentions behind the operation”. And they added: “We think that the offer was good for the Spanish hotel industry, the shareholders of NH and Barceló and the economy of the country as a whole, which would have benefitted from having a national champion to go out and compete seriously overseas”.

In response to NH’s rejection, Barceló “said the discussion was over”. According to sources at the company, “no other proposals are possible”.

The decision of NH’s Board of Directors was made public at the end of trading. NH’s shares finished trading yesterday at a price of €6.115 per share, after rising by 1.83%. Since Barceló expressed its interest in NH, the share price of the latter has increased by 22% (…).

NH closed 2016 with sales of €1.475 billion, an EBITDA of €181 million and a net profit of €30.8 million. The group’s strategic plan for the next three years forecasts a recurring profit of €100 million and an EBITDA of up to €290 million in 2019.

Meanwhile, Barceló closed 2016 with turnover of €2.855 billion, net sales of €1.98 billion, an EBITDA of €339 million and a net profit of €125 million.

At the operating level, NH has 380 hotels and 59,000 rooms in more than thirty countries, whilst Barceló owns more than 230 hotels in 22 countries and almost 52,000 rooms.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Sabadell Offers €33M for Duro Felguera’s HQ in Madrid

20 November 2017 – Eje Prime

Sabadell may complete the purchase of a new asset very soon. The financial institution is close to signing the acquisition of the headquarters of the company Duro Felguera for €33 million. The Asturian company, which is fighting hard to avoid having to file for creditor bankruptcy, would raise liquidity for its internal battle as a result of the agreement.

Interestingly, Duro Felguera must have rejected an offer amounting to €38 million from Sandra Ortega, the daughter of the founder and President of Inditex, Amancio Ortega. According to Voz Populi, although she was offering a higher financial proposal, she was also imposing the condition that the company remain as the tenant of the property for ten years, in return for a price of €2 million per year and a seven-year deposit.

By contrast, Sabadell is offering €33 million without any requirement for the company to remain in the building or to pay any deposits, which means that Duro Felguera would see a cash inflow of between €10 million and €15 million after paying off its loan.

Original story: Eje Prime

Translation: Carmel Drake

Colonial Increases Its Stake In Axiare To 29% & Launches Takeover Bid

13 November 2017 – Inmodiario

Colonial has acquired an additional 13.3% stake in the share capital of Axiare from some of the company’s former key shareholders, including 9% from Pelham Capital. Moreover, it has formulated a voluntary takeover bid for the remaining 71.4% stake in “Axiare Patrimonio Socimi, S.A.”. The consideration on offer consists of a cash price of €18.50 per share and is subject to Colonial acquiring a stake that represents no less than 50% plus one share of the total share capital of Axiare.

Colonial, which first acquired shares in Axiare just over a year ago with the purchase of 15% of the company’s shares, plans to close the operation during the first half of 2018. The offer price represents a premium of 13% above Axiare’s current share price and 21% above the most recent NAV reported in June 2017.

A Spanish giant worth €10,000 million

With this operation, Colonial would consolidate is position as one of the leading European platforms in the prime office market in Paris, Madrid and Barcelona. Axiare’s portfolio, comprising 74% offices and with 77% of the portfolio located in Madrid, clearly complements the strategy to develop the location and characteristics of Colonial’s asset portfolio.

“This operation continues Colonial’s path of growth and consolidates its leadership position as one of the leading European real estate companies with a great capacity to generate real estate value”, explains Juan José Brugera (pictured above, right), President of Colonial.

The acquisition of Axiare would allow the entity to add €1,710 million in value to its existing portfolio, whereby taking the total asset value to €10,000 million. The resulting portfolio would span an operating surface area of 1.7 million m2, plus 330,000 m2 under development. Colonial, which currently holds a portfolio comprising solely office buildings, 75% of which are situated in prime locations and 97% of which are occupied, would whereby accelerate its commitment to the market in Madrid, where the entity would have a portfolio of office buildings worth €2,600 million.

Following the operation, the exposure to Spain, which currently accounts for 31% of Colonial’s asset value, would increase to represent 42% of the total. The entity’s combined portfolio would have 58% of its value located in Paris, whilst the office portfolio in Madrid and the portfolio of assets in Barcelona would represent 27% and 10%, respectively.

Seizing the optimal moment in the market

Combined, the two portfolios would generate forecast turnover of €350 million, based on the current asset base in each case. Plus, revenues from the potential to generate future income from the various value-added and renovation projects underway by both companies would also have to be added to that figure. Those projects are mainly focused on the market in Madrid and could increase the combined entity’s forecast rental income to €470 million (…).

Full financial backing

The operation is being financed in its entirety by JP Morgan through a bridge loan, which includes capital underwriting (…).

Ramón y Cajal are Colonial’s legal advisors.

Original story: Inmodiario 

Translation: Carmel Drake

Liberbank Agrees To Sell €750M RE Portfolio To Bain

11 October 2017 – El Confidencial

Liberbank has agreed to sell a portfolio of foreclosed properties worth €750 million to the fund Bain Capital, after ruling out a rival offer from KKR. According to sources familiar with the situation, the transaction will be closed at a price of between 45% and 48% of the initial value (the final figure is the only matter that still needs to be agreed), in other words, with a discount of between 52% and 55% of the book value. That haircut is lower than the 66% that Santander had to apply to divest Popular’s property portfolio in the summer.

The aforementioned sources explain that, in the end, this portfolio does not include any non-performing loans, but rather contains foreclosed assets only. The sales price implies a higher discount than the net value (after provisions) at which Liberbank recognises these assets on its balance sheet (around 40%, albeit based on their appraisal value as at 2017), which means that the entity will have to recognise an additional loss as a result of this sale. But it will cover some of that loss with funds resulting from the €500 million capital increase that it approved on Monday and to which its main shareholders have already signed up.

The fact that Liberbank has had to offer a lower discount than Santander did for the sale of Popular’s assets is explained by three factors. Firstly, the size and urgency of the operation: the bank chaired by Ana Botín sold a much larger portfolio, amounting to €30,000 million, which it wanted to divest from its balance sheet as soon as possible, and whereby shield itself from the possible legal annulment of its purchase of Popular.

The second is that Santander sold only 51% of its portfolio, in other words, in that case, the bank will continue to receive income from the rental or sale of the assets in its remaining 49% stake. A better price can always be negotiated when the buyer acquires the rights to all of the revenues associated with a given portfolio. The third reason is that “not all of the assets are the same, and Popular’s portfolio contained a lot of poor quality properties”, according to one of the sources consulted. In other words, Liberbank’s portfolio contains better quality assets.

Ensuring survival on its own

(…). As El Confidencial has reported, both this real estate operation, as well as the capital increase, are consequences of demands made by the (Spanish) Government and the Bank of Spain to strengthen Liberbank’s solvency for fear of a repeat of a collapse like Popular’s (a fear that also led to the supervisor imposing a ban on the short selling of the entity’s shares, which still continues). In the face of interest from Abanca, Unicaja and CaixaBank to acquire Liberbank, the entity led by Manuel Menéndez decided to undertake these operations to ensure its survival as an independent player.

Moreover, the entity sold another €215 million in real estate assets unrelated to this portfolio during the third quarter. In that case, it sold the assets at their net book value, in other words, without the need to record any additional losses. In this way, Liberbank will easily exceed its objective of decreasing its property portfolio by €800 million this year, with most of the fourth quarter still remaining. In addition, during the same period, it decreased its non-performing loans by a further €230 million thanks to recoveries and foreclosures.

Original story: El Confidencial (by Eduardo Segovia)

Translation: Carmel Drake

Banco de Portugal Chooses Lone Star To Buy Novo Banco

5 January 2017 – ABC

The Board of Directors of Banco de Portugal has selected the US fund Lone Star to participate in the final negotiations to purchase Novo Banco. Its decision is based on the fund’s €770 million proposal, which would be accompanied by a subsequent injection of an equivalent amount to strengthen the bank’s capital.

But Antonio Costa’s Socialist Government will have the last word, and so the complex process is far from complete. Even so, it is clear that Lone Star’s offer is the most attractive, after the bid from the Chinese giant Minsheng was deemed to lack the necessary financial guarantees.

Lone Star’s only competitor in the bidding was an alliance between two other US private equity funds, Apollo and Centerbridge, whose most senior managers travelled to Lisbon to try to complete their negotiations against the clock.

The major difficulty stems from the fact that Lone Star is shielding itself through the creation of a commission bridge that holds Novo Banco’s non-strategic assets. Novo Banco is the cleaned up heir of the now extinct entity Espírito Santo. That situation is something that concerns the Portuguese Finance Minister, Mário Centeno, to such an extent that he has even raised the possibility of nationalising the entity.

In any case, the proposal from Lone Star falls well below the figure required for the operation to be considered a success by the Portuguese State, given that it put €4,900 million on the table in 2014 to avoid the total collapse of the entity when Espírituo Santo went bankrupt that same year.

Original story: ABC (by Francisco Chacón)

Translation: Carmel Drake

Santander Suspends The Sale Of Its Ciudad Financiera

29 November 2016 – Expansión

Santander has managed to suspend the sale of its headquarters in Madrid because it wants to exercise its right to buy the property, according to sources at the entity, something that it had not expressed any interest in doing so far during the current process.

This right is recorded in the contract that the bank signed in January 2008 with the consortium led by the British real estate investor Proinvest, with whom the sale of the Ciudad Financiera Santander was agreed, along the simultaneous rental of the property for a period of 40 years. “In the end, the future buyer is going to be our tenant and therefore, we have to consider that offer. Depending on the price, it may better for us to buy it from them given that we have the right to an option that has not been respected during the process”, said sources close to the bank.

As a result, Commercial Court number 9 in Madrid, has decided to suspend the purchase offer from the Kuwaiti fund ACG Equity Partners for Santander’s headquarters, worth €2,500 million.

Ruling

On the other hand, the Supreme Court has upheld a fine of €1 million imposed on Santander on 12 June 2015 by the Council of Ministers, as the universal successor of Banesto, for a “very serious” breach of the Law governing the prevention of money laundering and terrorist financing. (…).

Original story: Expansión

Translation: Carmel Drake

Adif & Repsol Sell Residential Plot In Madrid To Vía Célere

14 November 2016 – Expansión

The Madrilenian real estate company Vía Célere has been awarded a plot of land, with a buildable surface area of 14,859 m2, for €29.15 million, which the railway manager and the oil company put up for sale in Méndez Álvaro (Madrid).

Specifically, Vía Célere will pay €29,157,830 for the plot, located in the Méndez Álvaro area, next to Repsol’s headquarters in Madrid.

The plot, which has a surface area of 2,107 m2 and a buildable surface area of almost 15,000 m2, was put on the market in July for €27 million. The deadline for the presentation of offers closed on 2 November and on Friday, the vendors announced the winning candidate.

Until now, the plot of land was owned jointly by Adif (42%), Repsol (21.5%) and the Compensation Board of Méndez Álvaro (36.5%).

This is the second operation that the real estate company Vía Célere has completed in just a week. On 5 November, the company chaired by Juan Antonio Gómez-Pintado was awarded a plot of land located in the district of Moncloa-Arava, which the Directorate General of Heritage, which forms part of the Ministry of Finance, put up for auction.

For that plot, which has a buildable surface area of 11,230 m2, the real estate company paid €19.6 million.

Vía Célere is one of the most active property developers in the residential market. Created in 2010 by Juan Antonio Gómez-Pintado, it owns two other plots in the centre of Madrid, which it acquired in April, and has several projects underway in Barcelona. It is also marketing six developments in Brazil, in the capital and in several other cities.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Belgian Fund Ascencio Finalises Purchase Of Parque Abadía

8 November 2016 – Expansión

The Spanish real estate market is starting to welcome new players. After two years during which opportunistic funds and Spanish Socimis have been responsible for the lion’s share of investment operations, 2016 has seen several institutional investors and companies enter the market.

Such is the case of Ascencio. The listed Belgian real estate company (SIR, according to its French acronym), which specialises in well-located commercial assets with first-rate tenants, has decided to place its focus on Spain.

After years focusing on the Belgian market (where 62% of its assets are located) and France (which accounts for 33% of its portfolio), Ascencio arrived in Spain in March with the purchase of three premises in Madrid, Valencia and Barcelona, leased to the chain Worten, owned by the Sonae group. In this first operation, Ascencio spent €27.3 million, a figure that it is going to almost triple with its second transaction in Spain, given that the Belgian firm is the favourite to buy the Parque Abadía retail complex in Toledo.

Parque Abadía, which has a surface area of 64,000 m2, is the most important retail establishment in the province. With a retail surface area covering more than 54,000 m2, its main tenants include Alcampo, Decathlon, Media Markt, C&A, Conforama, Kiabi, Merkal and Norauto. Leroy Merlin also operates and owns a store in the complex, which has a surface area of more than 9,000 m2.

Inaugurated in November 2011, the retail complex has 2,680 parking spaces. Last year, Parque Abadía received more than six million visitors, and that figure is expected to be even higher in 2016.

Several investment funds and Socimis have expressed their interest in the property. Nevertheless, Ascencio’s offer, amounting to €80 million, is the best positioned, say sources close to the process.

The vendor is the British fund Rockspring, which has been focusing its investments in Spain on logistics centres in recent months, including the purchase of assets as well as the development of new establishments.

The sale of Parque Abadía is expected to be closed before the end of the year, according to sources in the market. Ascencio currently has funds amounting to €600 million to invest in the three European markets in which it has a presence, and has named Spain as its primary focus.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Drago Finalises Purchase Of Gas Natural’s RE Jewels

7 November 2016 – Expansión

The investment firm Drago Capital, together with the Canadian pension fund manager PSP Investments, has emerged as the clear candidate to acquire the real estate jewels of Gas Natural Fenosa in Madrid. The firm is now holding exclusive negotiations with the energy company to put the finishing touches to a deal that is likely to close within the next few weeks.

According to market sources, the offer from the Spanish real estate vehicle manager, which was presented as part of a consortium with the Canadian fund, has supplanted those submitted by the other suitors also interested in the assets.

The operation values the energy company’s assets in Spain’s capital at just over €300 million, which means that this will be the largest sale and leaseback transaction (sale to a third party and subsequent rental of the property) since 2010.

The firm chaired by Isidro Fainé engaged the real estate consultancy firms CBRE and Cushman & Wakefield in the summer to sell its main real estate assets in Madrid. This process sparked interest amongst private equity funds and investors alike, both at home and overseas.

Other candidates

Specifically, in addition to Drago, the investors Iba Capital, Henderson Park and a family office participated in the bidding until the latest round. Has Capital, which had also expressed its interest in Gas Natural’s properties, withdrew at the last minute as it was unable to raise financing.

The assets up for sale are: the group’s headquarters in Madrid, located on Avenida de San Luis 77; a property on Avenida de América 38; the Acanto complex, at number 11 on the same street; and the Antonio López complex on Calle Antonio López 193.

Altogether, the global surface area of the four complexes amounts to 57,000 m2. In addition, the portfolio of assets includes 1,695 parking spaces. (…) .

Gas Natural’s move comes at a time when its competitors are also divesting their real estate assets.

Specifically, Torre Cepsa – one of the Cuatro Torres in Madrid – was acquired just two months ago by Pontegadea. That purchase – the largest ever undertaken by Amancio Ortega’s investment vehicle – was completed in September and saw the founder and largest shareholder of Inditex spend €490 million.

Meanwhile, Endesa’s headquarters in the capital is owned by Merlin; and Iberdrola’s headquarters in Bilbao is partially owned by Kutxabank.

Repsol still owns its headquarters in Madrid, in Méndez Álvaro, however, there has been speculation that the oil company may sell the asset. (…).

According to the consultancy JLL, real estate investment in the office segment is expected to exceed €2,400 million in 2016. That figure falls below the record €3,170 million achieved last year due to the limited supply of high quality products. During the first nine months of 2016, investment in offices amounted to €1,572 million, with Madrid accounting for the vast majority of that figure (€1,150 million).

Original story: Expansión (by R. Arroyo & M. A. Patiño)

Translation: Carmel Drake

Barclays Puts Its HQ In Madrid Up For Sale

5 October 2016 – El Confidencial

An iconic building in a unique location. That is the key selling point for Plaza de Colón, 1, the address of Barclay’s headquarters in Spain and the building that the British entity has decided to put up for sale in an operation that symbolises the bank’s downfall in the country.

The British entity has launched a process to sell the building for an amount that, depending on the bids received, could reach €55 million. In exchange, Barclays undertakes to remain as the sole tenant for a year, which will allow the new owner to lease the building to a new firm once it has completed the necessary renovation. Several sources familiar with the deal say that CBRE has exclusive rights to this operation, but neither the consultancy firm nor the bank have made any comments in this regard.

This divestment is the perfect finale to a real estate strategy that started to take shape two years ago, when Barclays sold its retail business to CaixaBank for €820 million. The British entity left this building outside of that transaction, as part of a reorganisation of its assets in Spain that followed the agreement with the Catalan bank.

In the specific case of the headquarters in Colón, the sale of the property by the former subsidiary (Barclays Bank SAU) to the mother ship in London was recorded at €15 million, an amount that will now allow the entity to recognise significant gains from its sale.

Following the agreement with CaixaBank, Barclays has limited its operations in Spain to activities involving investment and corporate banking, areas in which the entity hopes to gain market share in the future.

In fact, an official spokesperson acknowledged that “Barclays has started to explore the option of putting the building it owns in Colón up for sale”, and explained that the reason is that “we are considering the possibility of relocating the headquarters to a site that offers a better service in terms of facilities, technology and comfort, and which is tailored to the investment and corporate banking businesses that the bank is now focusing on and wanting to grow in Spain”.

End of an era

Barclays, which was ranked as the sixth largest entity in the country in its hey day when it purchased the former bank Zaragozano, took ownership of this three storey building two decades ago, when it acquired Banco Valladolid.

Now, with its sale, the bank is looking to take advantage of the strong investor appetite that currently exists in the Spanish real estate market. This interest is barely being met on the supply side, given that all buyers are complaining about the lack of quality buildings for sale along the Castellana thoroughfare, the most prime area in Madrid.

In this context, Plaza de Colón is experiencing a real metamorphosis, given that besides this operation, Mutua Madrileña has received several offers for its famous Torres de Colón, whilst BPA holds in its hands the future of the former headquarters of Banco Madrid.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake