Colonial launches an 800 million takeover bid to control 100% of its subsidiary SFL




During the presentation of results for the first quarter produced a couple of weeks ago, Colonial's leadership sent a message to the market by assuring that it had recovered its investment appetite. No sooner said than done. This Thursday, the real estate company announced to the CNMV that it had reached an agreement with Predica, a subsidiary of Credit Agricole, to buy the 13% it owns in the French SFL. An operation with which the real estate company will increase, at least, its participation in its subsidiary to 95%.

At least. Because Colonial's intention is to eat up all of SFL's capital stock. For the remaining 5%, it will launch a public acquisition offer (opa) this Friday. Specifically, the company led by Juan José Brugera and Pere Viñolas will offer 46.6 euros and five newly issued Colonial shares for each title of the French company.

Besides, the
real estate
The long-term relationship between SFL and Predica will continue with the creation of new joint ventures, 51% owned by SFL and 49% owned by Predica, in certain assets (103 Grenelle, Cloud, Cézanne St. Honoré and 92 Champs Élysées). SFL will fully own several assets (90 Champs Élysées, 104 Hausmann, Galerie Champs Élysées and Washington Plaza) acquiring Predica's stakes in the companies holding these assets.

Within the purchase operation of that 13% in SFL (of that percentage, 5% will be acquired directly and 8% through the repurchase program of shares of the Socimi), Colonial opens its shareholding to the subsidiary of Credit Agricole. Predica takes 4% of the real estate, which does not rule out making new investments in other assets in the medium term. In addition, Colonial will increase capital by 350 million to reinforce this acquisition.

From the point of
monetary view,
the operation is valued at just over 800 million euros. Because to the 350 million of the expansion described above are added another 150 of the cash payment for the takeover bid and another 300 million for the exchange of assets that will take place in the newly created joint venture.

From an operational point of view, Colonial plans to increase the value of its portfolio in Paris by one billion. The French city will represent 60% of its portfolio, ahead of Madrid (25%) and Barcelona (12%) when the operation is completed, which according to the Spanish listed company will be in September of this year. In the presentation of results, the company already warned that it would reinforce its commitment to the French city.

The CEO of the company, Pere Viñolas, stressed that with this purchase Colonial simplifies its shareholding structure. The operation will not mean, in the short term, the disappearance of SFL, which will maintain its listing. In addition, Colonial expects to maintain a 37% leverage when the acquisition is completed, which in its opinion would allow it to maintain the current credit ratings.

Regarding the effects of the pandemic in the negotiations, Viñolas has indicated that the Covid has had little impact, since it is an operation that has been developed in a long process and the talks have borne fruit in recent months. .

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