Tag: premium

ECI Sells 2 Assets in Madrid & Bilbao to Corpfin for €100M

3 August 2018 – Eje Prime

El Corte Inglés is continuing to divest property. The department store group, the largest in its sector in Europe, has closed the sale of two more properties, on prime streets in Madrid and Bilbao, to Corpfin Capital. The sale & leaseback operation has been closed with a gain of 40% with respect to the market value of the properties, at around €100 million.

Specifically, the group has divested its property at number 41 Calle Princesa in Madrid, which spans 11,400 m2 and whose market value is estimated to be around €18 million.

The company has also sold the building located at number 20 Gran Vía in Bilbao to the Spanish fund. That store has a surface area of 5,500 m2 and a market value of around €38 million.

Both properties have been on the market for two years, although the operation was closed off market. El Corte Inglés has signed a long-term lease contract with the new owner that, according to sources familiar with the operation, will charge rents that are 20% higher than the market average on both streets.

The Madrid-based group, chaired since June by Jesús Nuño de la Rosa, has framed this operation within its asset divestment plan to reduce the debt that has been weighing it down for several years. The company owns 92 centres in Spain.

El Corte Inglés has received offers for the purchase of some of its most profitable establishments, including those in Madrid, Barcelona and Marbella. One of those is Torre Titania, formerly the Windsor Building, in Madrid. At the other end of the spectrum, the department store giant owns several stores opened during the first few years of the crisis: almost 24 points of sale, most of which generate significant losses.

One of its most recent operations was closed in October, when the company sold a building in Sevilla to Stoneweg for €10 million, as reported by Eje Prime. The objective of the new owner is to convert that property into a hotel.

Original story: Eje Prime (by P. Riaño & I. P. Gestal)

Translation: Carmel Drake

Barceló Offers €2.48bn For NH & Sets 3-Month Negotiation Period

21 November 2017 – Expansión

To create a hotel colossus with more than 600 hotels and 109,000 rooms in Europe, Latin America and the USA, and one of the largest tourism companies in Spain. With this objective in mind, the Barceló group has initiated contact with the NH Hotel Group to propose one of the largest hotel mega-operations in recent years in Spain.

Barceló is offering a swap equation that involves valuing each NH share at €7.08. In other words, it is willing to pay €2.48 billion for the company in total. That valuation represents a premium of 27% over the group’s average share price during the three months leading up to 30 October, of €5.56. Moreover, that premium rises to 41% if we consider the company’s closing price last Friday of €5.

Yesterday at 12:30, Spain’s National Securities and Exchanges Commission (CNMV) lifted the suspension on trading that had been weighing down on NH’s shares, but the avalanche of purchase orders meant that it took another 45 minutes for the shares to actually start trading again. By the close of business, NH’s list price had soared by 11.8%, to €5.59. In this way, its market capitalisation rose from €1,751 million on Friday to exceed €1,950 million. So far this year, the hotel company has seen its share price rise by more than 46%, however, it is still well below the €14.70 per share that it reached in 2007, at the height of its stock market boom.

Barceló submitted to the CNMV a letter sent by Simón Pedro Barceló, Co-President of Group Barceló, to the Chairman of the Board of Directors of NH, Alfredo Fernández Agras, in which he proposes considering the merger of the two companies. According to the initial proposal, the Mallorca-based firm would end up owning 60% of the merged group. Barceló explains that his interest in this merger stems from “the great strategic sense and the exceptional potential for the creation of value for the shareholders of both companies”.

The letter also opens the door for the merged group’s corporate headquarters to be located in Madrid and it proposes that the maximum governing body of the merged company, in which Grupo Barceló would hold a majority stake, would have sufficient members to ensure that the existing shareholders of NH are represented.

Barceló proposes a merger, in other words, “the integration of Grupo Barceló and NH through the delivery of new shares issued by NH to Grupo Barceló, keeping the company listed”. “Our intention is to integrate all of the assets and liabilities of Grupo Barceló, including our Hotel and Travel divisions, which we believe could contribute value to the combined group. Nevertheless, we are willing to consider different alternatives regarding the perimeter of the assets and liabilities in order to facilitate the success of the transaction”, said Barceló.

Three months to reach an agreement

The offer, which is non-binding and conditional upon a due diligence (detailed analysis) provides for a period of “up to 3 months for the completion of this work, to reach an agreement between the two parties and submit a transaction to our respective governing bodies for definitive approval”. In fact, Barceló said that he is willing to consider alternatives with respect to the perimeter of the operation to facilitate it.

If the proposal ends up going ahead, it would result in the creation of the largest Spanish hotel group, ahead of Meliá, which at the end of 2016, had 375 hotels and 96,369 rooms. It would become one of the largest players in the sector in Europe, behind only the British firm InterContintental and the French company Accor.

Barceló has engaged Santander as financial advisor for the operation and has not hired any legal advisor.

NH views the offer with suspicion

From the get-go, the offer has been viewed with suspicion by NH, which indicated to the CNMV that it had received “an unsolicited, preliminary and non-binding expression of interest” from Barceló for the merger of the two businesses.

According to this offer, Barceló would have “a majority on the administrative board”. Moreover, NH reminded the regulator that its Board of Directors recently approved a 3-year strategic plan “involving an independent project for significant growth, which is still valid today”.

NH’s largest shareholder is the Chinese giant HNA, which holds a 29.5% stake, but it is not represented on the Board of Directors following its expulsion last year due to a conflict of interest. After HNA is the British fund Oceanwood, with a 12% stake; and Hesperia, the chain chaired by José Antonio Castro, with a 9% stake.

Analysts think the merger makes “strategic sense” 

Analysts at Renta 4 and Bankinter agree with Barceló that the operation makes “strategic sense”.

Original story: Expansión (by Rebeca Arroyo and M. L. Verbo)

Translation: Carmel Drake

M&G Real Estate Buys 16 Santander Branches For €56.2M

25 May 2017 – El Economista

The fund manager M&G Real Estate has signed another deal in Spain, this time to become Banco Santander’s new landlord. Specifically, the firm has just signed an agreement with the Socimi Uro Property to acquire 16 of the financial institution’s branches for which it has paid €56.2 million.

The operation, which was closed at a premium with respect to the most recent valuation of the transferred portfolio, also includes the granting of a call option over another branch, which may be executed in the short term.

According to the Socimi, which owns approximately one-third of Banco Santander’s branches, the portfolio that M&G has purchased generates annual rental income of €3.04 million and comprises seven branches from the so-called Blue portfolio and nine from the Green portfolio.

The classification of the branches into these portfolios reflects the maturity dates of the corresponding rental contracts. Thus, in the first case (Blue portfolio), the lease contracts are due to terminate in 2045, 2046 and 2047, and may be extended for another seven years. In the case of the assets included in the Green portfolio, the lease contracts are due to mature between 2036 and 2038.

These terms of 30 and 20 years, respectively, match the British manager’s investment strategy, given that it seeks safe, long-term operations. In this way, the firm’s first operation in Spain was closed in 2015, when it acquired Telefónica’s former headquarters in Madrid, located in the heart of the city on Calle Ríos Rosas. It paid €175 million for that property, which is now the headquarters of WPP.

Following the sale, Uro will continue to own a portfolio of bank branches whose approximate value amounts to €1,893 million. When the Socimi debuted on the stock market, in March 2015, it managed 1,136 Santander branches, nevertheless, in April 2015, it sold a portfolio of 381 branches to Axa Real Estate for €308 million, leaving 755 branches, which cover a surface area of more than 340,000 m2.

Original story: El Economista (by Alba Brualla and Javier Mesones)

Translation: Carmel Drake

ECI Accelerates Sale Of 140,000 Doubtful Loans

10 April 2017 – Voz Populí

Financiera El Corte Inglés has selected three overseas funds as candidates to go through to the final round of its tender to award the first sale of doubtful loans in its history. The entity that is jointly owned by Banco Santander (51%) and El Corte Inglés (49%) has chosen Axactor, Cabot Financial and Link Finanzas as the finalists in Project Alexandria.

Through this process, Financiera El Corte Inglés wants to clean up the worst part of its credit portfolio, by selling off loans that it deems irrecoverable. Project Alexandria comprises 140,000 doubtful credits, mainly corresponding to loans worth €160 million.

This operation is generating a great deal of interest in the market, because to date, El Corte Inglés and its financing arm have not put any portfolios on the market. For this reason, the funds are all willing to pay a premium in order to begin to collaborate with the largest consumer finance company by volume of loans.

The three funds selected to participate in the final phase of the process are investors that have been operating in Spain for a while. They all have their own recovery platforms and they have a vested interest in making a name for themselves in this market.

Who are the candidates?

Axactor arrived in Spain two years go. It is a Nordic group founded by former directors of Lindorff, one of the largest platforms in this segment in Europe, which in Spain controls Aktua and provides services to Sabadell and BMN. Like its fellow group from Norway, Axactor arrived in Spain chequebook in hand and within a few months had purchased several portfolios plus the business and team at Geslico, the former subsidiary of Lico Leasing.

Cabot is also an international recovery platform, based in the United Kingdom, and with connections to Encore, one of the largest global groups, itself based in the United States. Cabot established itself in Spain a couple of years ago and made its break with the acquisition of one of the largest servicers, Gesif.

Meanwhile, Link Finanzas is another British fund whose interest in Spain dates back even earlier than those of the other two investors. Link has been purchasing portfolios in the Iberian market for years. Last year, it consolidated its international presence with the purchase of the last vestiges of BBVA’s consumer business in Italy, for €100 million.

One of these three investors will be awarded the first portfolio to bear the El Corte Inglés brand. They are expected to submit their binding offers, which could amount to €15 million – €20 million, after Easter.

The latest data from Asnet and the CNMV reveal that Financiera El Corte Inglés is one of the market leaders by market share and profit, given that in 2016, it earned more than €66 million. Besides this portfolio, there are currently more than a dozen portfolios in the market, from the main entities in the country, including: BBVA, CaixaBank, Bankia, Liberbank, Ibercaja and Popular, amongst others.

Original story: Voz Populí (by Jorge Zuloaga)

Translation: Carmel Drake

Slim Launches €2,800M Takeover Of FCC

7 March 2016 – Expansión

On Friday, the Mexican tycoon Carlos Slim (pictured above) announced a takeover bid for 100% of FCC, after taking ownership of 36.5% of its share capital. Slim is proposing a cash offer at €7.60 per share. This price represents a premium of 15.3% with respect to Friday’s closing price of €6.59. The company has 260.5 million shares in circulation. Together with the other 118 million shares that the company is issuing through its current capital increase, Slim’s offer values the group at €2,870 million.

Slim is launching the takeover after exceeding the 30% threshold set by Spanish legislation for mandatory takeovers. On Friday, Slim explained to Spain’s National Securities Market Commission (CNMV) that it, directly or indirectly, controls 29.558% of the voting rights through Control Empresarial de Capitales (CEC), a subsidiary of Inversora Carso (IC), plus it has been “attributed” another 7.036% of the share capital. According to financial sources, this latter percentage comes from the pledge made in relation to the loans granted to Esther Koplowitz, FCC’s other major shareholder.

Obligation

The possibility of the FCC takeover has been on the cards since Slim agreed to refinance FCC, but until now it was unclear how he was going to be able to exceed the share capital threshold of 30%, beyond which level the obligation to undertake the operation is legally activated.

Slim acknowledges that “IC is obliged to make a public offer for the acquisition of all of FCC’s shares and to address that offer to all of the shareholders at a fair price”. Slim’s takeover of FCC’s capital requires the sudden takeover of Portland, the cement subsidiary of the construction and services group.

As a result, Slim announced another takeover on Friday, in this case of Portland, in parallel to the takeover of FCC. It will be launched by FCC itself and will involve the group delisting from the stock exchange.

The takeover of Portland, also in cash, will be made at €6 per share, which represents a premium of 14% above the closing price on Friday (€5.26) and 12% above the price on Thursday. At that price, Portland is worth around €310 million, compared with €272 million based on its list price on Friday.

FCC already controls 77.94% of Portland, which means that the takeover is targetted at 22% of the share capital. Following the takeover, Portland will no longer be listed on the stock market. Investors that do not participate will lose out in terms of the liquidity of their shares. Although Slim is offering a premium for his takeover of FCC, the price still falls below the price at which he purchased his shares (€9.75), which means that it will only partially offset the excess over book value at which his stake is recorded.

Original story: Expansión (by C.Morán and M.Á.Patiño)

Translation: Carmel Drake

Lar Completes €134.9M Capital Increase

10 August 2015 – Expansión

The Socimi Lar España has completed a capital increase for 19.9 million shares, representing 50% of its capital, with demand exceeding supply by 9.2 times.

According to the company’s report to Spain’s National Securities Market Commission (CNMV), Lar España Real Estate’s shareholders subscribed 98.49% of the new shares during the preferential subscription period.

The Socimi has issued the shares with a nominal value of €2.00 and a premium of €4.76, and so has secured additional funding of €134.9 million in total, which it has earmarked for further investment.

During the preferential subscription period and the period for assigning additional shares, requests were received to purchase 183.5 million shares, however supply amounted to just 19.9 million shares.

The new shares will begin trading today (Monday 10 August 2015).

Original story: Expansión

Translation: Carmel Drake

Merlin Closes A €1,034M Capital Increase To Buy Testa

16 July 2015 – Expansión

Yesterday, the Socimi Merlin Properties announced a €1,033.7 million capital increase, representing 66% of its current share capital. The operation will allow it to finance the purchase of Testa, the subsidiary of Sacyr, which it has bought for €1,986 million.

The capital increase will have preferential subscription rights and will involve the issuance of 129,212 million shares, with a value of €8 and a premium of €7 per share. Last April, the Socimi chaired by Ismael Clemente closed its first capital increase amounting to €613.8 million, with the issuance of 64,605,999 new shares, to finance the purchase of real estate assets, offices and retail premises.

Merlín debuted on the Madrid stock exchange in June 2014 with a market capitalisation of €1,250 million, at €10 per share. Yesterday, it closed trading at €11.50 per share, up 1.86%, and its market capitalisation amounted to €2,228.9 million. Merlin’s main shareholders, which include UBS, Marketfield, EJF apital, BNP Paribas Asset Management and the fund Gruss Capital, are expected to participate in the capital increase.

The integration of Testa and Merlin will create a real estate giant with assets worth around €5,500 million, gross annual income of €290 million and a market capitalisation of close to €4,400 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

A Peak Inside The Luxury Homes On Juan Bravo, 3

12 March 2015 – Expansión

The Socimi and the North American management company are investing €120 million to rescue the most exclusive residential project in the city. Designed by Rafael de La-Hoz, its 50 apartments will cost around €4 million (each).

Three months ago, the Socimi Lar España and the North American management company Pimco agreed to purchase the company Juan Bravo, 3. The agreement will result in the revival of one of the most exclusive residential projects in Madrid, which has suffered from the full force of the real estate crisis.

“It was a transaction that was in the market and we were not the only interested party. Nevertheless, many funds dropped out when they saw the complexity of the project. There were lots of stakeholders: from the judge overseeing the bankruptcy process to the former owners of the company and its creditors”, explains Jorge Pérez de Leza, who heads up Lar España.

The Socimi proposed that the company be brought out of bankruptcy, rather than be liquidated, through the purchase of the remaining loans from its main creditor (Santander). In total, both partners invested €120 million in the land and (associated) loans, as well as in a residential building adjacent to the plot, which used to belong to the former owners of Juan Bravo 3. “The existing creditors are going to be paid, which is the innovative part (of the transaction), and we hope that the bankruptcy proceedings will be lifted within the next few days”, said Pérez de Leza.

The investment has been made through a company whose share capital is owned split 50:50 between Lar and Pimco, one of the largest fund managers in the world. “When Pimco joined the Socimi as an ‘anchor investor’, it suggested that we make a number of joint ventures in the Spanish market. Pimco wants to continue investing in Spain and we think that the next wave of investment will be in the residential market”, predicts the director. With this project, Lar does not exceed the threshold set for Socimis (that no more than 20% of the assets in their portfolio may not generate returns) and therefore it does not rule out continued investment in the premium residential sector.

After closing the acquisition of this land, Lar España hired the architectural firm Rafael de La-Hoz, which had also been appointed by the former managers to design the project. “Juan Bravo 3 offers the opportunity to construct a new building concept with four façades. The homes, from the garages to the bedrooms, will be completely new. As such, we will have almost total freedom in terms of the form (it takes) and we will be able to do without elements such as common areas and patios”, says Rafael de La-Hoz.

This architect will be responsible for designing the block of homes, which will contain between 50 and 55 units, on a plot of land measuring 26,203 square metres. “Last summer, we conducted a study in the market to see what type of project would fit best and we identified that there is room for luxury (properties) in this area. Therefore, each home will measure at least 250 square metres and on average, will measure between 400 and 450 square metres, as well as having three parking spaces”, says Jorge Pérez de Leza.

The homes will have an average price of €10,000/m2 (prices will range from €8,000/m2 to €12,000/m2 depending on the floor). “It will be different to anything else that exists in the area. There will be common areas with a gym, spa and a space for events. We are going to customise the product and for that reason, we have created a specific team of technical architects to advise clients in their choice of materials and the distribution of their homes, as well as on implementation costs and timings”.

Buyers

The sale of these homes will begin this summer, although the developers have already received a number of requests. “We expect 60% of the homes to be sold to foreigners; and the remainder to be sold to people who live in the area and want a new home, or who have a home in La Moreleja or Somosaguas and now want to move to the centre”. The construction work will begin at the start of 2016 and will be completed in mid-2018. “Some of the below-ground work has already been completed, but we will have to improve it because it is somewhat dilapidated”.

In addition to fifty homes, the property will also have a shop space measuring around 1,000 square metres, which will be rented out.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake