Blackstone Will Pay Merlin, Santander & BBVA €948M for 50.01% of Testa

18 September 2018 – Cinco Días

Another major movement in the real estate sector and with the same star as the buyer: the US giant Blackstone. After acquiring the Socimi Hispania, which specialises in hotels, the fund has now set its sights on Testa, the largest owner of rental housing in Spain.

Blackstone has already agreed to purchase 50.01% of the Socimi (…) from three of Testa’s largest shareholders (Merlin Properties, Santander and BBVA), according to a statement filed by the real estate company with the Alternative Investment Market (MAB) on Monday. Nevertheless, Acciona, the other major shareholder, has not sold its stake. The US fund manager is carrying out the operation through the company Tropic Real Estate Holding and is paying €948 million, whereby valuing Testa at €1.895 billion.

Blackstone is paying €14.327 per share. The company’s closing price at the end of trading on Friday was €14, representing a premium of just over 2%.

Blackstone is keeping the offer open for the other shareholders. In fact, the document sent to the exchange by Testa explains that the bidder “has committed to buying all of the remaining shares in the company” under the same conditions.

Testa’s shareholders regard this operation as an exit following their failure to launch a major IPO in June, when the political uncertainty, above all surrounding Italy, caused a surge in the markets. The intention of Merlin, Santander and BBVA (and to a lesser extent Acciona, which wanted to remain as an industrial partner) was to divest their stakes with that great stock market debut. Now they have found an escape route with Blackstone as the buyer.

Merlin also reported on Monday that with this operation, it will raise €321.2 million in exchange for its 16.95% stake in Testa. The funds obtained by Merlin will be used to reduce its debt in line with the objectives set out in the company’s business plan.

BBVA, which owned 25.24% of Testa has also sold all of its shares. Meanwhile, Santander sold just 7.82% of the 36.87% that it held in Testa, which made possible the operation that has given Blackstone control over the entity.

The new Testa Residencial is a listed real estate investment company promoted in 2016 by the banks and Merlin. The latter company had been left with homes following its purchase of the former Testa from Sacyr in 2015; meanwhile, Santander and BBVA contributed rental homes from the property developer Metrovacesa. Finally, last year, Acciona incorporated more than 1,000 homes, worth €340 million, to close the current alliance between the four shareholders.

Testa is currently the market leader in the residential rental sector in Spain. It has a portfolio of 10,615 units, worth €2.675 billion, mainly private housing, with annualised gross rental income of €85 million and an occupancy rate of 91.4%.

Original story: Cinco Días 

Translation: Carmel Drake

Blackstone Buys 50% of Testa from Merlin, Santander & BBVA

17 September 2018 – Eje Prime

Blackstone is strengthening its commitment to Spanish property. The US fund, which has been very active in the domestic real estate market in recent years, has just completed the purchase of 50.01% of Testa from Merlin, Santander and BBVA, according to a statement issued by the parties.

Testa is the largest manager of rental homes in Spain, with 10,615 real estate assets in its portfolio and a turnover of €85 million in annualised gross income. Most of the shares of the Socimi, which has been listed on the Alternative Investment Market (MAB) since July, will now be owned by Tropic Real Estate Holding, a company managed by Blackstone.

One of the largest shareholders of the company, the real estate firm Merlin, has pocketed €321 million from this operation, which means valuing the own funds of Spain’s largest Socimi at €1.895 billion. With the funds obtained, the company led by Ismael Clemente plans to reduce its debt, within the framework of the company’s objectives.

Following Merlin’s exit from the company, Acciona Inmobiliaria, the real estate investment arm of the energy firm, has been left as the main domestic shareholder of the listed company.

Testa’s homes are primarily located in Madrid, although the firm also has a presence in other major cities in the country such as Barcelona, San Sebastián, Valencia, Las Palmas de Gran Canaria, Valencia and Palma, amongst others.

Testa, created in 2001 by the construction company Sacyr, invested €228 million in March in the purchase of 4,500 homes from the BuildingCenter, the real estate arm of CaixaBank. Moreover, following its incorporation onto the MAB, one of its largest shareholders, Acciona Inmobiliaria studied the possibility of becoming a reference shareholder of the Socimi.

Original story: Eje Prime 

Translation: Carmel Drake