Colonial Group has launched a take-over attempt of rival Spanish-listed property company Axiare Patrimonio.
Colonial, a Spanish REIT (or Socimi), said it has increased its stake in Axiare from 15% to 28.3% and has launched a voluntary tender offer to acquire remaining shares.
A take-over would lift Colonial’s asset value to €10bn and consolidate its standing as a landlord of prime office assets in Paris, Madrid and Barcelona, it said.
The company is offering €18.50 per share – a 13% premium to the share price – in cash to Axiare shareholders.
The deal is subject to Colonial acquiring at least 50% plus one share of Axiare’s share capital. The transaction is expected to close during the first half of 2018.
Juan José Brugera, chairman of Colonial, said: “This transaction reinforces the growth trajectory of Colonial and consolidates its leadership position as one of the leading European real estate companies with great ability to generate value.
“There are many synergies arising from this transaction, which predispose us to create a core product that addresses the growth on demand, maximising value return to our shareholders.”
The acquisition of Axiare would increase Colonial’s portfolio by €1.71bn, giving it 1.7m sqm of operational assets and 330,000sqm of assets under development.
Axiare’s portfolio, with 74% of offices and 77% of the portfolio located in Madrid, is complementary to Colonial portfolio’s strategy, location and characteristics, it said.
Colonial, whose portfolio is made up solely of office buildings, 75% of which are prime and 97% occupied, would end up owning €2.6bn of Madrid offices.
Following the acquisition, the exposure to Spain, which currently accounts for 31% of the value of Colonial’s assets, will increase up to 42% of the total portfolio, it said.
Colonial said the acquisition has been fully funded by JP Morgan through a bridge financing and a stand-by equity underwriting.
Source: I&PE Real Assets