Tag: stakes

Thai Hotelier Minor Acquires 8.6% of NH from Oceanwood

23 May 2018 – Expansión

The Thai hotel company Minor Hotels Group has entered the shareholding of NH Hotels with the purchase of a package of 30 million shares, representing 8.6% of the Spanish hotel chain’s share capital, from the British investment fund Oceanwood for around €190 million, as revealed by Expansión.

The agreement reached between Oceanwood and the company headquartered in Bangkok has been closed for a price of €6.40 per share, slightly above NH’s share price at the end of trading yesterday (€6.35). The hotel chain’s share price has appreciated by 5.83% so far this year. Evercore has been the advisory bank to Minor. On the legal, Baker has advised the Thai firm whilst Garrigues has advised Oceanwood.

Minor, whose shares are listed in Bangkok, has a market capitalisation of USD 6 billion and owns 161 hotels in 26 countries. The chain is the owner of the brands Anantara, Avani, Elewana, Oaks and Tivoli and also operates establishments owned by the chains Four Seasons, Marriott and St. Regis.

The purchase of this share package makes Minor NH’s third-largest shareholder, behind the Chinese holding company NHA, with a 29.5% stake and Grupo Hesperia, in the hands of the businessman José Antonio Castro, with 9%. Oceanwood will continue as the fourth-largest shareholder, with almost 5%, although it will strengthen its weight after exercising the conversion rights of a convertible bond that it subscribed to five years ago and which it will execute soon. The fund first invested in NH in 2013 by purchasing stakes owned by the savings banks and has grown its share over the last few years.

In this way, as a consequence of the conversion of all of NH’s convertible bonds, Oceanwood will hold 9.5% of the share capital post-conversion, assuming that all of NH’s convertible bonds currently in circulation are converted.

The exit of the Chinese

This shareholder move comes in the middle of the divestment process being undertaken by HNA, which in January announced that it had engaged JPMorgan and Benedetto, Gartland and Company to “review” its shareholder position in NH and to identify potential buyers.

That decision by the Chinese group came after Barceló’s failed proposal to merge its businesses with those of its rival NH. The offer, which was overwhelmingly rejected by NH’s Board of Directors, stirred up rumours of a takeover once again. Last week, the Chinese group revealed that, after receiving interest from various investors, it plans to put its 29.5% stake up for sale.

NH, with 380 hotels and around 59,000 rooms, closed the first quarter of 2018 with a net profit of €21.7 million, compared with losses of €24.8 million during the same period in 2017.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Ardian Places Indigo Sale On Hold after Raising €700M in Debt

4 May 2018 – Expansión

Ardian and its partner Predica (Credit Agricole) have decided to put on hold the sale of their parking lot subsidiary Indigo, one of the giants in the European sector with significant interests in Spain. The shareholders, which have been looking at various options for their investment over the last year, have opted to re-leverage the company in the end, with a €700 million bond issue, which will be used to refinance some of the debt that expires in 2020, and also, to distribute an extraordinary dividend to shareholders.

With this move, the possible sale of the former VinciPark has been put on hold, after Ardian went off the idea of divestment in 2017 when it did not obtain satisfactory offers for the asset. According to sources close to the operation, Indigo’s shareholders were left with three options: put the “for sale” sign back up; re-leverage the company and distribute an extraordinary dividend to the shareholders; or encourage a merger agreement with other parking lot groups.

Until a few weeks ago, all three options were on the table. One of the possibilities involved exploring an alliance with the Spanish firm Saba. The parking lot group controlled by Criteria (La Caixa) is also undergoing a process of transformation after the decision was taken by its minority shareholders, which together hold a 49% stake, to exit the company. That round of contact did not prosper and Indigo decided to begin the procedure to launch a macro debt issue, which took place on 12 April.

Sources in the sector believe that a merger between Saba and Indigo would have business logic given the minimal overlap and their capacity to form a group with sufficient critical mass to explore a stock market listing. Trading on the stock market has always been the ultimate dream of Saba’s founding partners. By contrast, Ardian avoids investments in listed groups (…).

Indigo is, together with Qpark and Apcoa, the largest parking lot group in Europe. According to the latest available figures, the company recorded turnover of €897 million in 2017, with an EBITDA of €310 million. The company’s net financial debt amounts to €1.666 billion. Saba and Empark also feature in Europe’s Top 8 ranking of the largest parking lot groups, but their turnover figures are significantly lower than those of Indigo and QPark.

According to experts, another factor that would contribute to accelerating the corporate movements in the sector is the ownership structure. The giants in the sector are owned by investment funds and private equity firms with a relative dearth of long-term investors. QPark is controlled by KKR, whilst the German firm Apcoa is owned by Centerbridge. Ardian controls Indigo and Macquarie is the new owner of Empark. Saba is the only company with an industrial shareholder – Criteria – and a long-term interest (…).

Although not its largest market, Indigo conducts significant business in Spain. Revenues amounted to €41 million in 2017, with an EBITDA of almost €20 million. It is Indigo’s third largest market in Europe, after France and the United Kingdom. The outlook for Spain is positive. According to the consultancy firm DBK, revenues from the rental of parking spaces (…) in Spain and Portugal amounted to €1.145 billion in 2017, which represented an increase of 3.8% with respect to the previous year. In 2016, that figure grew by 4.5%.

Original story: Expansión (by C. Morán)

Translation: Carmel Drake

Hispania’s Shareholders Approve Block Sale of its Office Portfolio for €600M+

4 April 2018 – Eje Prime

Hispania is putting the sale of its office portfolio back on the table. Today,  at its General Shareholders’ Meeting, the Socimi will submit to approval the block sale of its rental office portfolio, a set of 25 buildings worth €603 million. It is a divestment that the Socimi, in which George Soros holds a stake, launched a year ago, suspended in October 2017, and which it has now resumed.

Hispania’s assembly is also going to approve the distribution to shareholders of an extraordinary dividend of €1.97 gross per share linked to the completion of that divestment. The payment will be charged against the issue premium and will involve distributing €215 million in total. This dividend will be added to the ordinary remuneration to shareholders, which will amount to €0.87 per share this year, the first payment of which, amounting to €0.41295 gross per share, was already made in March.

Besides Soros, who holds a 16.6% stake in the firm, the other main shareholders are other overseas institutional investors, such as Fidelity, with a 7% stake, Conepa, with another 6% stake, and Bank of Montreal and BlackRock, with 3% each. The Socimi chaired by Rafael Miranda is framing the sale of its office portfolio within its strategy to focus on the hotel business.

Other items on the agenda at Hispania’s General Shareholders’ Meeting include the re-election of the directors to their roles as the Chairman of the firm and another five members, including Concepción Osácar, José Pedro Pérez-Llorca and Joaquín Ayuso. Hispania will also approve its accounts for 2017, which reported a net profit of €222.82 million, down by 27.7% compared to the previous year.

Original story: Eje Prime

Translation: Carmel Drake

Sareb’s Socimi Makes it MAB Debut with 1,383 Homes on the Outskirts of Spain’s Large Cities

3 April 2018 – Expansión

Sareb’s Socimi is making its debut today on the Alternative Investment Market (MAB) with a total valuation of €152.7 million. The company owns 1,383 homes, inherited from the rescued savings banks, located close to Spain’s large and medium-sized cities. Most can be found in very dynamic metropolitan areas such as Vallecas, with annual price rises of 10%-12%, and Hospitalet de Llobregat, as well as in places further afield, such as Manresa (Barcelona).

Témpore Properties, which has just two employees on its payroll, has delegated all of its management work to Azora, which will charge €1.5 million for its services in 2018 and €1.7 million in 2019, provided it fulfils all of the objectives set out in the business plan in terms of profitability and occupancy rates.

Azora, which is also the management firm for Hispania and Goldman Sachs, employs 140 people, half of whom work for Sareb directly or indirectly.

“Our greatest challenge is to increase the profitability of the rental portfolio from 3.7% to 5.5%”, explains Nicolás Díaz Saldaña, CEO of Témpore Properties and former Head of Rentals at Sareb.

As a first measure, the company is going to increase its rents, taking advantage of the renewal of its rental contracts. 33% of them expire in 2018, another 36% in 2019 and the remainder in 2020. “The prices that were applied by the savings banks are very out of date”, explains Díaz Saldaña. The average increase will amount to 15% and will rise to 20% in the outskirts of Madrid and Barcelona. The company assures that, despite those increases, 80% of its tenants are renewing their contracts.

Témpore is tightening up the requirements to access its homes in an effort to reduce its default rate, which currently stands at 4.8%. It demands the payment of a rental insurance from future tenants, which has a cost of €10 per month, as well as the one-month mandatory deposit. Moreover, the monthly rental cost may not account for more than 40% of the total income of the family unit.

In total, 24% of Témpore’s homes are located in Barcelona. “The Catalan political risk is not holding back rental prices. The rise in the metropolitan area of Barcelona stands at around 6%-10%”, says the CEO. 36% of the new package of homes that Sareb is going to transfer to the Socimi this year are located in Cataluña.

Témpore does not have any bank debt and has a credit line open with Sareb amounting to €2 billion, which it has not made use of yet.

The bad bank owns 98.5% of the Socimi and the intention is to allow investors (primarily institutional) to acquire shares, in such a way that will end up with a minority stake within three years. Témpore assures that there are many real estate funds, insurance companies and pension funds with liquidity willing to invest.

“Our business is one of scale. Témpore has to aspire to being as large as Testa Residencial, our best comparable”, says Díaz Saldaña.

Testa, in which Santander, BBVA, Acciona and Merlin all hold stakes, is planning to make its stock market debut at the end of May or beginning of June this year.

Original story: Expansión (by R. Lander)

Translation: Carmel Drake

Axiare Raises €93M Through Accelerated Capital Increase

10 March 2017 – Expansión

Axiare has completed a capital increase amounting to €93 million, through the accelerated placement of 7.18 million new shares, which represent almost 10% of its share capital.

The operation was performed at an issue price of €13 per share, which represents a discount of 2.6% on the market price at the end of trading on Tuesday. Axiare’s share price fell by 1.27% on Wednesday to €13.18 per share.

The company has said that it will use the funds raised to continue investing. Axiare has identified investment opportunities amounting to more than €1,100 million, of which deals amounting to €400 million are in “advanced stages of execution”.

“The placement has been performed amongst a solid base of qualifying investors and international institutions, including current shareholders as well as new investors. This has allowed Axiare to diversify its shareholder base, improve its free float and increase the liquidity of its shares.

Currently, Axiare’s largest shareholder is Colonial, with a 15% stake, followed by T.Rowe Price (9.7%) and Citigroup (9.2%). Following this operation, those shareholders may see a dilution in their stakes.

Original story: Expansión (by R.Arroyo)

Translation: Carmel Drake

Ardian Puts Its Parking Lot Business Up For Sale

8 February 2017 – Expansión

The infrastructure fund Ardian and the French financial institution Predica have engaged two investment banks to look into the sale of Indigo (formerly Vinci Park). “Ardian and Credit Agricole have engaged two investment banks to handle the sale of Indigo”, said sources close to the process to Reuters. On the basis of prices paid in the most recent parking lot transactions, Indigo’s shareholders could ask for more than €3,000 million for the company.

Ardian and Credit Agricole, through its subsidiary Predica, both own a 49.2% stake in Indigo. The remainder is in the hands of small shareholders. Sources in the sector indicate that Morgan Stanley and Rothschild are the banks responsible for the sale.

With an EBITDA of almost €300 million in 2016 (€285 million in 2015), the sale of Indigo is likely to attract interest from other international parking lot operators, as well as from large investment funds.

During the first half of 2016, Indigo generated revenues of €416 million, up by 9% compared to the same period in 2015. Last week, it announced a detailed review of its strategy after winning several contracts in Europe and America and it committed to undertaking a series of acquisitions in Canada, the USA and Colombia. “The group’s shareholders have started a strategic review to support the company’s upcoming developments”, said the company.

Other operations in the sector in Spain, such as the sale of Parkia, have been sold for more than 15x EBITDA, although in that case, the operation was smaller with a more limited geographical presence.

Between 2014 and 2015, the French services and infrastructure group Vinci sold its parking business to the current shareholders in two phases. Indigo is one of the largest operators of parking lots in Europe, with a presence in 17 countries and more than 500 cities. It manages more than 4,000 underground parking lots, 2,500 kilometres of parking areas on urban roads and more than 2 million parking spaces.

Original story: Expansión

Translation: Carmel Drake

CNMC Approves Merger Between Merlin & Metrovacesa

30 August 2016 – Expansión

Authorisation from the CNMC / The merger will result in the creation of the largest real estate company in Spain, with assets worth almost €10,300 million. The group will compete with the large European Socimis.

On Friday, Spain’s National Commission for Markets and Competition (CNMC) approved the merger between the Socimi Merlin Properties (owner of Torre PwC in Madrid, pictured above, amongst other assets) and Metrovacesa, the real estate company controlled by Banco Santander, in an operation announced on 21 June. With the green light from the supervisory body, the door has been opened for the creation of a giant that will become the largest real estate company in Spain and one of the largest in Europe. The group will own assets worth €10,297 million in total.

The CNMC approved the deal on the basis that the barriers to entry into the tertiary real estate business (shopping centres, offices, logistics warehouses, retail premises and hotels) are not instrumental. And on the basis that this business, which comprises domestic and international companies, is quite fragmented in Spain, according to the body.

The analysis performed by the Commission focused on the relationship of control between Merlin, Testa – the real estate company that the Socimi purchased from Sacyr and in which it owns a 99.93% stake, and for which it plans to complete the integration of the remaining 0.07% within the next few months – and Testa Residencial, which is fully owned by Testa and therefore controlled indirectly by Merlin.

Three carve-outs

The operation will involve the carve-out of Metrovacesa into three lines of business, as revealed by Expansión on 22 June. One real estate line, one residential line and one line for assets under development and land.

The new Merlin will group together all of the real estate business and will acquire Metrovacesa’s tertiary assets, worth €1,672 million. To execute the operation, the Socimi will increase its share capital by 146.7 million shares, at a price of €11.40 per share.

The residential arm of Metrovacesa will carve out its assets from its rental housing business and move them into the newly created company Testa Residencial. The gross value of that company’s assets will amount to €980 million and it will also take over debt amounting to €250 million not transferred to Merlin as part of the tertiary business.

In terms of the third line of business, a newly created public company will take ownership of Metrovacesa’s remaining assets, in other words, the set of land and work in progress in the tertiary sector whose characteristics “do not fit with the profile defined by Merlin for its investments”. The total value of the assets of this third company will amount to €326.49 million.

The Boards of Directors of both companies will meet on 15 September to give their final approval of the operation.

In terms of the shareholder structure of the new Merlin and Testa Residencial companies, Banco Santander will be the largest individual shareholder of both, with stakes of 21.95% and 46.21%, respectively. Merlin will be left with a 68.76% stake in the tertiary business and Metrovacesa will have a 31.24% stake.

In the case of Testa Residencial, Metrovacesa’s shareholders will acquire 65.76% of the share capital.

Original story: Expansión (by María Sánchez)

Translation: Carmel Drake