Dubai fund hints at quick deal on Colonial bid

The Investment Corporation of Dubai (ICD) has said it doesn't rule out reaching agreement with Colonial's main shareholders on its bid for the debt-laden Spanish real estate company 'in the near future'.

Dubai's sovereign fund also informed the Spanish stock market regulator CNMV that it is amending the terms of its original conditional offer which ICD and the shareholders failed to agree on by an earlier deadline of 3 March. After the CNMV's prompting, the two sides confirmed they were still in talks.

According to a report of Spanish newspaper Expansion, Colonial key shareholders and the ICD are studying a possible split-up of the company, with ICD taking the property rental business worth some EUR 9 bn. Land and development assets worth EUR 2 bn would stay with the main shareholders, Spanish property tycoon Luis Portillo and the Nozar group.

ICD is not interested in these residential assets as Spain's once booming housing market - which helped transform Colonial into one of the leading property groups in country - has slowed significantly. It is understood that if a break up of the company is agreed, ICD will launch an offer of EUR 1.2 -1.3 per share for the rental property business, which owns offices in Paris, Madrid, and Barcelona.

Colonial shares rose as much as 6% in Madrid trading on Wednesday on hopes the parties would reach a deal.