Eurosic poised to take control of SIIC de Paris in €900m deal

French REIT Eurosic has signed an exclusive agreement to acquire a further 29.63% stake in peer SIIC de Paris from Société Fonciere Lyonnaise, in a deal which would give it full control of the €1 bn business park landlord.

Eurosic, which last week agreed to buy 59% of SIIC de Paris from Spain's Realia at €22 per share, said it has been granted an exclusivity period of six months to buy the additional interest for a price of €24.22 per share less any future dividend, representing a further investment of around €310 mln.

The €24 per share offer compares to a closing price of €19.19 for SIIC de Paris shares on the day prior to the launch of the offer. This price includes compensation to SFL for giving up rights arising from its shareholder pact with Realia, Eurosic said. SFL, which bought the stake in SIIC de Paris in 2010, was granted a pre-emption right to buy the remaining interest in the company in case Realia would sell off.

In total, Eurosic is forking out €870 mln mln for the combined 89% shareholding in SIIC de Paris, and said it plans to buy out the remaining 11% stake in a second stage.

The acquisition will enable Eurosic to double its portfolio to around €2.9 bn from €1.4 bn at present. Eurosic, a real estate investment trust focused on value-add transactions, has been actively selling and buying assets over the past few months in a major strategy change introduced in 2011 by its new owner, Charles Ruggieri's Batipart.

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 just over €1 bn, largely consisting of commercial properties in Paris.

Realia's disposal is part of a strategy by its owners to facilitate the sale of the property company. Realia's shareholders FCC and Bankia have been looking to split the company into the French and the Spanish businesses to make it easier to find a buyer.

Orion Capital Managers and AEW Europe have reportedly been selected as the final bidders for the stake in Realia. Bankia owns 25% in Realia while FCC controls 36.9%.

SIIC de Paris is the latest French real estate investment trust to change hands. French mutual insurance group SMABTP is looking to buy a major stake in French REIT Société de la Tour Eiffel while a Qatari investor has recently acquired an 8.55% stake in SFL from Credit Agricole Corporate & Investment Banking.