The battle for control of the two Italian office funds Tecla and Berenice continues with Gamma RE, a joint venture between Pirelli RE and Morgan Stanley, obtaining an extension to its bid for Berenice. The offer will now run until 20 July, in line with the opposing offer from Zwinger, the special purpose vehicle for Goldman Sachs' Whitehall fund. Gamma, which offered EUR 685 and EUR 678 for each unit of the Berenice and Tecla office funds respectively, raised its offer for Tecla last Friday to EUR 690 per unit, representing a 1.8% premium on the fund's net asset value (NAV) at the end of 2006. Gamma RE did not raise its offer for the Berenice office fund, which stands at EUR 685 per unit. 'This probably means they are not going to launch a counterbid for Berenice,' Martijn Geers, an analyst at merchant bank Kempen & Co said. 'Pirelli RE-Morgan Stanley joint venture will probably buy the Tecla office fund, while Goldman Sachs/Caltagirone will likely take over Berenice', he added.
The battle for control of the two Italian office funds Tecla and Berenice continues with Gamma RE, a joint venture between Pirelli RE and Morgan Stanley, obtaining an extension to its bid for Berenice. The offer will now run until 20 July, in line with the opposing offer from Zwinger, the special purpose vehicle for Goldman Sachs' Whitehall fund. Gamma, which offered EUR 685 and EUR 678 for each unit of the Berenice and Tecla office funds respectively, raised its offer for Tecla last Friday to EUR 690 per unit, representing a 1.8% premium on the fund's net asset value (NAV) at the end of 2006. Gamma RE did not raise its offer for the Berenice office fund, which stands at EUR 685 per unit. 'This probably means they are not going to launch a counterbid for Berenice,' Martijn Geers, an analyst at merchant bank Kempen & Co said. 'Pirelli RE-Morgan Stanley joint venture will probably buy the Tecla office fund, while Goldman Sachs/Caltagirone will likely take over Berenice', he added.
At the beginning of June, Gamma RE said it would buy the Tecla and Berenice units currently listed on the Milan stock exchange with the offer starting on 11 June. Since then, a bidding war started with Pirelli RE/Morgan Stanley on one side, and Goldman Sachs/Caltagirone's Unione Generale Immobiliare on the other. In the latest move, Whitehall offered EUR 678 for each Tecla unit, and EUR 725 for each Berenice unit, representing a 5.9% premium over the fund's NAV. 'The investors' interest is probably due to the discount the two funds trade to Net Asset Value. Pirelli RE/Morgan Stanley's first bid at EUR 590 and EUR 540 per unit was way below the funds' NAV. Most of the Italian funds trade below NAV' , Geers added.
If Gamma RE's offer succeeds, the assets owned by the funds will probably be delisted from the Milan Stock Exchange and transferred, together with other non-listed assets, to a new company that could seek a listing in Amsterdam. The offers are for just over 550,000 quotas of Tecla, or about 88% of the total quotas issued, and for over 548,000 quotas of the Berenice fund, or about 95% of the total quotas issued. Pirelli RE, manager of both funds, owns the remaining 5% of Berenice's quotas, as well as 2% of Tecla. Gamma RE already owns 10% of the quotas issued by Tecla closed-end fund.
