French listed property group Covivio said on Thursday that it has signed an agreement to acquire an additional 8.3% stake in its hotel arm, Covivio Hotels from insurance group Generali.
Covivio is paying for the stake with Covivio shares through a capital increase of nearly €300 mln, on the basis of an exchange ratio of 31 Covivio shares for 100 Covivio Hotels shares. This transaction, which is expected to close by the end of April, represents the equivalent of the acquisition of €500 mln of assets, the company said in a statement.
Covivio will hold 52.2% of Covivio Hotels after the deal and will launch a mandatory public exchange offer for the remaining share of the capital. Covivio does not intend to implement a squeeze-out following the completion of the offer.
A limited partnership listed on Euronext Paris, Covivio Hotels is currently 43.9% owned by Covivio, and 53.5% by long-term institutional investors, namely Crédit Agricole Assurances, BNP Paribas Cardif, Generali, Assurances du Crédit Mutuel, Sogecap and CDC.
With the acquisition Covivio is strengthening its exposure to a portfolio of 313 prime hotels, 89% of which are located in the main European tourist cities such as Paris, Berlin, Rome, London, Barcelona and Madrid. As a result of the deal, the share of hotels in Covivio's portfolio will rise to 20% versus 17% at the end of 2023 and up to 32% in the event of 100% ownership of the shares following the offer.
'As a pioneer and leader in hotel real estate, today Covivio significantly reinforces its position on this dynamic and growing market. This transaction allows us to continue the balancing of our portfolio between offices, housing, and hotels, and to strengthen the Group’s equity,' commented said Christophe Kullmann, Covivio’s Chief Executive Officer.
