Tag: takeover bid

Hispania Continues Takeover Bid For Realia Despite FCC’s Withdrawal

12 February 2015 – El Economista

The company, owned by Soros and Paulson, does not intend to increase its bid.

Hispania is continuing with its plans to buy Realia, the real estate company owned by Bankia and FCC, even though the construction company has decided not to sell its 36.88% stake.

The company, whose main shareholders are the business tycoons George Soros (pictured above) and John Paulson, announced a voluntary takeover for 100% of the real estate company at a price of €0.49 per share; and sources close to Hispania have confirmed to El Economista that they are going to proceed without making any changes to their offer. “The process is advancing normally, they are waiting for the CNMV to approve the prospectus and then they will launch a takeover bid with the same conditions as the one already announced”.

The company, which is managed by Azora, took this decision after holding a meeting to discuss the new situation following FCC’s withdrawal.

The group, controlled by the Mexican Carlos Slim, explained through a notification to the CNMV that “the decision reflects the fact that we are reviewing our investment and divestment plans, following the (capital) increase, which allowed us to strengthen the Group’s equity and financial situation”. Moreover, Slim, who took on a controlling stake in the construction company as a result of the (capital) increase, is also evaluating the legal options that would allow him to purchase Realia through one of his other companies.

Below market price

Hispania’s offer was never well received by the market, as it was considered to have offered a knock-down price for the real estate company, at 28% below Realia’s list price. Now, following FCC’s announcement, the situation is more complex, as Hispania needs its offer to be approved by 55% of its shareholders.

Besides the construction company, Realia’s second largest shareholder is Bankia, which controls 24.95%. The entity is under an obligation (having been mandated by Brussels) to sell its industrial holdings, however, it still has a margin of two years remaining to undertake these divestments.

Original story: El Economista (by Alba Brualla and Virginia Martínez)

Translation: Carmel Drake

FCC Suspends Sale Of Realia And Threatens Hispania’s Takeover Bid

6 February 2015 – El Confidencial

Carlos Slim’s impact on FCC is starting to be noticed. The new majority shareholder of the infrastructure group has laid his cards on the table and has decided to officially suspend the sale of the 36.886% stake FCC holds in Realia, a decision that threatens the takeover bid (OPA or public offer for the acquisition of shares), launched by Hispania for the real estate company, whose prospectus is pending approval by the CNMV – Spain’s National Securities Market Commission.

The other major shareholder of Realia, Bankia, which owns 24.9% of the capital, is standing by its decision to sell, despite the change in its partner’s position. This leaves the floodgates open for a war to seize control of the company, which owns desirable assets such as one of the KIO towers.

The market has known that this scenario could arise since the beginning of the year, during which time Realia’s shares have soared by more than 40%, from the price of €0.51 per share at the end of the year, in line with Hispania’s offer, to reach the current price of €1.30.

The pieces in this game of chess are placed in the perfect position for a wave of strategic moves to be unleashed. Hispania has the upper hand in that it holds an exclusive agreement with Realia’s creditor funds, a deal that may be extended for the whole of 2015, even if the takeover bid that is currently underway were to fail.

Fortress, King Street and Goldman Sachs are Realia’s preferential creditors with a debt of €793 million, from which Hispania has successfully negotiated a haircut of €167 million. This saving allowed them to launch their takeover bid at €0.49 per share. In addition, the funds have exempted Hispania from an onerous clause that obliges any potential buyer to liquidate their debt within a period of five days.

Against this competition, Slim has his own upper hand: he is free from this clause, since it is only applicable when a change of control occurs and, if the player that enters the arena is FCC itself then there would be no such change of control, since the infrastructure group has always held the reins of Realia, which is widely known as its real estate subsidiary.

This means that the Mexican tycoon now has several options on the table: from waiting and seeing whether Hispania’s takeover bid fails and then entering the fray; to starting to negotiate a new transaction with Hispania and its associated funds; to starting an operation with new players, since Bankia is determined to sell and if Hispania’s takeover bid does not going ahead then it will open a new process to close the sale.

The Socimi (Hispania), meanwhile, has conditioned the success of its bid on taking over 55% of Realia’s share capital. In fact, in an ideal world, Hispania would take control of the smallest number of shares possible, above this threshold, to enable it to take full control of the real estate company for the lowest price possible.

From this point of view, both the 24.9% stake that Bankia has put up for sale and the almost 13% stake that Sareb holds (through the debt associated with the former stakes held by Lualca and Prasa, which controlled 9.5%) are key, as well as the participation loans that should be exchanged from this month onwards and which would allow it to takeover another almost 3%.

Meanwhile, Slim’s initial plans do not include the option of launching a counter-bid, or of establishing bilateral negotiations with Bankia, since that entity is obliged to undertake all of its sales in concurrent processes. But that would not be an impediment if Hispania’s bid fails and the entity launches another sales process, since the Mexican would enter the bidding.

In any case, only an official announcement, through a significant event with the CNMV, to suspend the sale of its stake in Realia would go against the interests of the Socimi, because Realia’s list price is well above the price of the takeover bid, which in theory discourages minority shareholders from accepting the offer, above all, when they also know that the world’s third richest man is also interested. And Slim certainly has acccess to credit.

Original story: El Confidencial (by R. Ugalde)

Translation: Carmel Drake

Carlos Slim Puts The Brakes On FCC’s Sale Of Realia

3 February 2015 – Expansión

The new controlling shareholder of the construction company FCC is evaluating his legal options for taking ownership of the listed real estate company, for which Hispania launched a takeover bid in November.

The emergence of the Mexican tycoon Carlos Slim as a new significant shareholder in the capital of FCC, represents a turning point in the plans of the Spanish group. The businessman has decided to put one of FCC’s most recent strategic decisions on hold, namely the sale of its historical stake in Realia, according to Expansión.

The turnaround in the performance of the real estate company since it put its stake in Realia up for sale, together with Bankia, at the end of 2013, reflects not only the limited income that the construction group will receive for its 36.9% stake, but also the interest shown by Slim in taking ownership of these assets. Slim has extensive experience in the sector through his own real estate company Carso.

To this end, the Mexican businessman has instructed lawyers to study the legal formulae that would enable him to buy Realia, given that he is the majority shareholder of one of the vendor companies.

The transaction is not without its complexities. On the one hand, FCC has made a commitment to Bankia, its historical partner in Realia, to sell the 62% stake that they jointly own, through a process led by Goldman Sachs.

In November, the Socimi Hispania Real launched a takeover bid for 100% of Realia at €0.49 per share. The offer valued the real estate company at just over €150 million, 28% below its market price at the time.

The takeover bid was accompanied by an agreement with Realia’s main creditors, the funds Fortress, King Street and Goldman Sachs, stating that they would sell 51% of their debt to Hispania and jointly recapitalise the company. The funds made an agreement to negotiate exclusively with the Socimi.

Hispania’s offer for 100% of Realia is conditional on its acceptance by at least 52.5% of the shareholders and so the decision as to whether the takeover bid will succeed or not rests with the two controlling shareholders, which have taken decisions on a consensual basis up until now.

Hispania’s offer is currently being considered by the CNMV, which is expected to make a ruling within a month or two. Then, FCC anad Carlos Slim will have to make a decision, once they know all of the details of Hispania’s plans. As a result of Slim’s interest in Realia, the real estate company’s shares soared in trading on Monday by 18.03% to reach €0.72.

Original story: Expansión (by R. Ruíz, D. Badía and C. Morán)

Translation: Carmel Drake

Lualca Sells 2% Of Its Stake In Realia Before Hispania’s Takeover Bid Is Approved

29 January 2015 – Expansión

The real estate company Lualca has reduced its stake in Realia to less than 3% (specifically, to 2.94%), after selling 2% of its capital.

The company, led by Luis Canales Burguillo, first invested in the real estate company Realia in January 2008, when it acquired a 5.02% stake. Lualca paid €88.37 million at the time, which represented a valuation of €6.35 per share.

Yesterday, the company’s share value stood at €0.605, still a long way off of the price per share (€0.49) specified in the takeover bid that Hispania launched over 100% of Realia’s capital at the end of 2014.

FCC continues to be Realia’s largest shareholder, with a 36.89% stake, followed by Bankia, with 24.95%. Grupo Prasa also holds less than 3%.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Realia Buys c/Goya, 29 For €27m Amid Hispania Takeover Bid

21 January 2015 – El Confidencial

Realia has just purchased an office building, located in the most elite section of Madrid’s Calle Goya, between Lagasca and Velázquez, for €27 million. In principle, this deal appears to be simply another one in the growing list of real estate transactions being conducted in the best areas of Madrid and Barcelona. However, it has connotations that make it different.

This acquisition comes amid the takeover bid that Hispania has made for Realia, for the outright purchase of the real estate company. And so, if that transaction comes to fruition, the Socimi managed by Azora will become the owner of Calle Goya, 29; another jewel in the crown of its growing list of assets.

Nevertheless, it may have to share the limelight with Hermanos Revilla, because that company is behind the transaction. Realia is the main indirect shareholder of Hermanos Revilla, since in addition to the 9.5% stake it owns directly, it also controls another 51% through its 76% stake in Planigesa.

The remaining 39.5% of the company is owned by the Revilla family, the industry dynasty whose patriarch, Emilio, was kidnapped by the terrorist group ETA in 1988. Father of three children, Antonio, Margarita and Carmen, the former now manages Hermanos Revilla’s investments and has negotiated the purchase of Goya, 29, according to market sources.

In fact, although Realia indirectly holds the controlling stake in the company thanks to Planigesa, and its CEO, Ignacio Bayón, carries out the same role in the affiliate, executive power over the company lies with Antonio Revilla. Market sources say that the company has always been managed with great autonomy and has financed this transaction using its own funds, which amounted to €48.7 million at the end of 2013, the last full year for which figures are available.

These factors explain why Realia, a real estate company controlled in turn by FCC and Bankia, has undertaken a transaction of this kind in the middle of the takeover bid launched by Hipania: the Revilla family is holding the reins of the transaction. The Socimi managed by Azora has put an offer on the table that values each share in the real estate company at €0.49, which brings the total value of the company to €157.7 million, versus the current listed value of €0.59.

A Busy Year End

On 22 December 2014, the CNMV admitted the takeover bid proposals for review, which are currently being analysed by the institution. Once the supervisory body gives the go-ahead to all of the documentation, Realia’s shareholders will have 15 days to accept the proposal or reject it. It was also during the last few days of 2014 when the Hermanos Revilla and Realia closed the acquisition of Goya, 29.

The acquired property has a surface area of 5,000 square metres for office use and 87 parking spaces. The building is currently empty and it has been purchased with a view to refurbishment, but with a guarantee from the vendor, a family group, that the new owners will receive annual rental income of €1.5 million, according to sources.

The ground floor of the building, located on one of Madrid’s most important shopping streets, is occupied by Cortefiel, but sources indicate that this asset has not formed part of the transaction closed by Hermanos Revilla and Realia, which consolidates the results of its affiliate in its financial accounts.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake