CaixaBank Repurchases 51% of Servihabitat from TPG for €176M

8 June 2018 – Expansión

The financial institution, which until now owned 49% of the real estate firm, is going to restore control of 100% of the firm four years after it sold the majority stake to TPG.

CaixaBank has announced an agreement with the fund TPG to repurchase 51% of the real estate manager Servihabitat for €176.5 million. With this operation, which will return full control over the real estate subsidiary to the financial institution, CaixaBank wants to enjoy “greater flexibility and efficiency in the management and marketing” of its real estate assets “as well as a reduction in its costs”.

The operation, which still needs to be approved by the competition authorities, will have a negative impact of around 15 basis points on CaixaBank’s first level capital ratio (CET1 fully loaded) and of around €200 million on the bank’s income statement this year.

Nevertheless, the entity chaired by Jordi Gual expects the impact to be positive over the next few years, amounting to around €45 million per year.

The financial institution sold 51% of Servihabitat to TPG in 2013, in an operation that valued the real estate subsidiary at €370 million and which generated a gross gain of €255 million for CaixaBank, which retained control of the remaining 49%.

The agreement between CaixaBank and TPG included a clause whereby Servihabitat would manage La Caixa’s real estate assets for a decade. Less than five years after that agreement was announced, CaixaBank has decided to recover 100% of the share capital of its real estate servicer.

In January, Iheb Nafaa was appointed as the CEO of Servihabitat to replace Julián Cabanillas, who had been linked to the firm for two decades, and who had served as the most senior executive for the last twelve years.

Nafaa is an Engineer in Statistics, Econometrics and Finance from the École Nationale de la Statistique et de l’Administration Économique in París (France) and has extensive experience as a director of companies such as BNP Paribas, GE Capital and Gescobro.

Original story: Expansión (by J. Díaz)

Translation: Carmel Drake

Santander & Apollo Call Off Altamira Negotiations

30 December 2016 – Vozpópuli

Santander’s repurchase of Altamira has run into trouble.

After months of to-ing and fro-ing, Banco Santander and Apollo have decided to call off their negotiations regarding the possible sale of the 85% stake that the US fund owns in the real estate company. And the reason is price, given that Ana Botín is not willing to meet the expectations of the asset manager chaired by Leon Black. Apollo will not drop its asking price below €1,000 million, whilst Santander’s informal offer amounts to around €800 million, according to several financial sources.

Unless there is a last minute change of heart, all indications are that Altamira’s share capital structure will continue as it is now: with 85% in the hands of Apollo and 15% controlled by Santander. The Spanish bank sold the controlling stake in the real estate company in 2013 for €664 million.

Santander’s intention was to repurchase its stake to create a world-leading property management firm, to administrate its assets in other countries where the default rate is rising, such as in Brazil. Santander engaged Citi to complete this operation. The possible repurchase has been on the table since Ana Botín (pictured above) took over as President of the bank, given that this sale was one of the things that she liked the least from her father’s inheritance.

Botín sees it as a much more expensive way of raising capital than would have been possible to obtain by other means. But unless she can afford a price that will allow Apollo to close this deal at a profit, it is unlikely to go ahead. This change in strategy comes at a time when Apollo is raising a new fund, amounting to more than €4,000 million, to invest in the south of Europe. Given that it has new ammunition to spend from now on, it will value a platform such as Altamira very highly

New strategy

Following this turnaround in negotiations, Apollo has decided to strengthen the future of Altamira be making acquisitions. Santander’s property management firm is well placed in two current acquisition processes: firstly for Unicaja’s real estate arm, GIA, where it is competing with Haya Real Estate; and secondly, for the first bad bank created by the Portuguese State, Oitante, which manages Banif’s problem assets – other players such as Servihabitat (owned by TPG and CaixaBank), Hipoges and Värde Partners (Banco Popular’s real estate shareholder) are also bidding in that tender.

If the latter operation bears fruit, it would be Altamira’s first international venture, and the ideal way for Apollo to generate value from this investment, and obtain more from its sale when it eventually decides to exit.

The fund chaired by Black (one of the 150 wealthiest people in the USA and owner of the painting The Scream) is putting all of its meat back on the grill in Spain after a couple of less active years. In 2013, it closed its largest two acquisitions in the country: Altamira and Evo Banco. Since then, its activity has been limited to the purchase of a small portfolio of homes from BMN and GE Capital’s mortgage portfolio in Spain. Moreover, Altamira was awarded one of the four management contracts by Sareb.

In recent months, Apollo has purchased one of the largest banking portfolios on the market, Project Sun from CaixaBank, containing hotel debt, and it is expected to soon close the acquisition of one of the aforementioned real estate platforms (Oitante or Unicaja).

Original story: Vozpópuli (by Jorge Zuloaga)

Translation: Carmel Drake