January 23, 2021

Neinor will control less than 5% of the developer market despite absorbing Quabit




Neinor has kicked off the foreseeable wave of mergers that is expected in the development sector with the purchase of Quabit. An operation that will cost 360 million euros between the acquisition of equity and the negotiation with creditors and with which, however, Neinor will not reach a 5% market share.

The promoter’s CEO, Borja García-Egotxeaga, explained this Tuesday the ins and outs of the operation together with the company’s financial director, Jordi Argemí, and the president of Quabit, Félix Abánedes. In his words “unlike the United States, where there are companies with 25% of the market, in Spain the sector is very fragmented.” That is why the manager believes that in the coming years “there will be a new wave of concentrations.”

Neinor does not rule out participating in new mergers, although in the medium term. At the moment, the acquisition of Quabit allows it to become a “National leader” with the capacity to build 16,000 homes and assets valued at 2,000 million euros. The operation has been defined by the CEO of the company as an «opportunity», which allows joining «two companies that complement each other well».

The promoter values in 61.5 million to his rival, but the operation reaches around 360 million due to the agreements reached with Quabit’s main creditor, Avenue. Specifically, Neinor will deliver 85 million and land in Mijas to pay off the liability.

Of course, Neinor gets a debt reduction of his rival close to 50 million euros, which will allow him to keep the debt below 30%. No agreement has yet been reached with the rest of the creditors (with Sareb it is being negotiated), which will cause Neinor will integrate into its balance about 240 million of debt from its rival, which will raise its liabilities to 400 million euros.

As Argemí explained, the cost of debt will remain at 4%, a percentage significantly lower than the 12% recorded by Quabit. Argemí has ​​also announced that both companies will dispose of their treasury shares and that the acquired land has the potential to generate revenues valued at 4,500 million.

“From a business point of view, we are entering an affordable housing segment,” García-Egotxeaga highlighted. 45% of Quabit’s land is finalist, and the developer has 1,400 homes in the construction phase, 250 in the final phase. The transaction strengthens Neinor’s position in the Henares Corridor, an area “with great growth potential.”

Slim’s decision

The president of Quabit up to now, Félix Abánades, explained in the same meeting that his company “can add a lot of value in the affordable housing segment” and that despite the stoppage that the company has registered in the works the level of expected deliveries ” It will remain”. Both parties have highlighted the synergies that the operation will generate.

With the “yes” of the majority of relevant Quabit shareholders, it remains to be seen what response the Mexican tycoon gives to the operation Carlos Slim, which owns 3% of the company. Abánades, who will go from controlling 20% ​​of the firm to 1.5% in the new company, has wanted the businessman to accept the exchange included in the absorption, which will mean exchanging one Neinor share for every 25,950 Quabit.

The market has applauded the operation. Quabit shares are up 12% at this time, to around 0.4 euros per share. Those of Neinor, meanwhile, remain flat. The promoter offered a premium of approximately 20% for its competitor, which it valued at 61.5 million euros.

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