EUROPE - BNP Paribas declined to comment this week on claims by Green Street Advisors that it was now increasingly likely to sell its €2.1bn majority holding in Klépierre, Europe's second largest shopping centre investor.
The likely disposal has been rumoured for some time as a contribution to the French bank's plan to reduce its risk-weighted assets by €70bn.
Its holding in the REIT amounts to around 4% of the bank's balance sheet.
In a research note, Green Street Advisors said it was still unclear whether BNP Paribas would agree a deal with a single buyer or float some or all of its stake via a block sale, which could result in a short-lived 20% share price discount.
Despite recent statements from senior managers at the bank suggesting it might be willing to sell assets it had previously ruled out, it is known to be targeting $22bn (€17bn) of US-denominated asset disposals in the first half of 2012.
"The French bank could decide to wait for a better exit pricing point," the note said.
Moreover, the research firm's analysts pointed out that the majority owner was in a relatively weak negotiating position vis-à-vis other investors because it would reduce its risk-weighted assets even if it sold its holding at a significant discount to the current share price.
The note added: "A motivated seller with a low cost-base provides a potentially dangerous cocktail mix for minority shareholders."
The AUM €1.5bn REIT has a pan-European portfolio that includes 308 shopping centres held by its subsidiary Ségécé and a further 48 Scandinavian assets acquired with shopping centre management firm Steen & Strøm.
Green Street Advisors analysts described the portfolio as "notably productive" and compared its likely divestment with the sale of Rodamco North America a decade ago.
"One key lesson … is that good-quality, hard-to-replicate shopping centre REITs can attract multiple bidders even in difficult economic circumstances," they said.
