September 24, 2020

The interest of large funds in Merlin revives the action of the socimi | Companies


Merlin Properties, which is trading at around 50% off its November highs, makes the company very appetizing for large real estate funds and venture capital firms. Yesterday, the action of the socimi was revalued almost 10% by the news about the possible interest of the Canadian manager Brookfield in a possible purchase of the company. But it is not the only large fund that has probed the possibility, according to financial sources. Even so, it would not be so easy to launch a takeover bid, since the crisis has raised a CNMV barrier to avoid purchases of collapsed securities,

Several funds have already contacted some of Merlin’s main shareholders, but none have made a formal offer, according to sources familiar with the exchanges. Brookfield would have been the last to sound out a takeover, an interest the newspaper published yesterday. Expansion. The Canadian firm declined to comment on it. Among Merlin’s large shareholders is Santander, with 16.7% of the capital, Manuel Lao Hernández, with more than 6%, or BlackRock, with almost 4%.

Although Merlin’s current capitalization is attractive, the takeovers they cannot be launched at any price in the next two years, as published Five days. The pandemic activates a legislative shield created in 2012, after the Argentine expropriation of YPF to Repsol, which requires a valuation report from an independent expert. This must certify that the price, which must also be offered in cash, is fair. Protection will be required when “the market prices, in general, or of the affected society in particular, have been affected by exceptional events such as natural disasters, situations of war or calamity or other derivatives of force majeure.” In other words, it must be clearly applied in the current situation. In the case of Merlin, the crisis has impacted him directly due to the confinement and closing of shopping centers as well as the renegotiation of rents, which can reduce his income by 60 million.

The interest of large funds in Merlin revives the action of the socimi

In this way, it is probable that the price of a possible takeover could approach 7,000 million euros, an amount that is close to the NAV or net value of the assets (appraisal of the properties subtracting the company’s debt).

Merlin is the largest listed Spanish real estate company, with assets located in Spain and a small portion in Portugal, worth around € 13 billion, which is obviously attractive to large funds that are committed to having a quality portfolio at prices With discount. In addition, the socimi has in the chamber a path of great growth, since it is a minority partner in the Castellana Norte District, the BBVA company and owner of a large part of the land of what is known as Operation Chamartín, renamed Madrid New North.

Abelló enters the capital

The businessman Juan Abelló has entered Merlin’s capital stock by taking securities worth a million euros, an investment he has made through his variable capital investment company (sicav) and during the second quarter of the year.

The businessman’s sicav takes titles from Merlin coinciding with the entry into the company of Manuel Lao, businessman in the gaming sector and former owner of the Cirsa group, who in recent months has taken 6% of the company and has become his second largest shareholder.

In Abelló’s case, this is the first foray he made through his sicav into a socimi, which, however, has already attracted the interest of another great fortune. Alicia Koplowitz had shares in the company between 2015 and 2016.

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