French REIT Eurosic has launched a tender offer for the remaining 8.2% stake it does not already own in Siic de Paris, in a move aimed at reaching the 95% threshold required in order to be able to take the company private.
French REIT Eurosic has launched a tender offer for the remaining 8.2% stake it does not already own in Siic de Paris, in a move aimed at reaching the 95% threshold required in order to be able to take the company private.
Eurosic, which already owns 91.8% in Siic de Paris, is offering €23.88 a share for the stake and said it plans to delist the business park landlord with a squeeze-out procedure in the event it gains a 95% shareholding.
Eurosic acquired its initial interest in SIIC de Paris in June from shareholders Société Fonciere Lyonnaise and Realia. In total, it forked out €870 mln for the shareholding, enabling it to double its portfolio to almost €3 bn from €1.4 bn previously.
Eurosic bought 59% of SIIC de Paris from Spain's Realia at €21.77 per share, and subsequently an additional 30% interest from SFL for a price of €24.22 per share less any future dividend.
According to Peter Papadakos, an analyst at Green Street Advisors, the main driver of the deal is Eurosic’s willingness to increase its critical mass, rather than the pure economics of SIIC de Paris’ portfolio. ‘This acquisition is consistent with Eurosic’s strategy to expand outside core Paris,’ he said. Eurosic’s largest shareholder, Charles Ruggieri’s Batipart had been implementing the same strategy focused on regional markets in the over 15 years that it managed Foncière des Régions, the property company it previously owned.
SIIC de Paris posted a net profit of €15 mln in 2013 and rental revenues of nearly €70 mln. The company has a low loan-to-value ratio of 30% and a portfolio valued at €1.5 bn, largely consisting of commercial properties in Paris. The occupancy rate stands at 73% compared to 99% for Eurosic's assets, resulting in a combined occupancy rate of 92%.