French REIT Gecina will become Europe's fourth listed largest real estate group with €19.3 bn of assets following its planned friendly takeover of French peer Eurosic.
The deal will also make Paris-listed Gecina Europe's leading real estate group for offices, with €15.3 bn of assets focused on Paris and the Paris region, after acquiring all of Eurosic's shares.
'The proposed friendly business combination with Eurosic represents a major step forward with the implementation of Gecina's total return strategy,' commented Méka Brunel, Gecina's CEO.
The takeover has the support of Eurosic's six main shareholders, representing 94.8% of the company's capital. Once the securities have been acquired, Gecina will submit a madatory public offer to the French authorities.
Gecina said Eurosic's integration will be facilitated by its new organisation, centred around two business branches, offices and residential, which will be implemented from July.
Eurosic portfolio
Eurosic's portfolio is valued at €6.2 bn and comprises mainly prime office assets located in Paris and the Western Crescent.
Gecina's offer values Eurosic's office portfolio in Paris at around €9,900/m2 and its office portfolio in the Paris Region at around €6,600 / m2.
The acquisition reflects an average implied yield of around 5.1% for the office portfolio. Its combined committed development pipeline will represent €2.5 bn, with 44% to be prelet.
The operation's financing is secured with a €2.5 bn bridge facility and a €1 bn capital increase. Ivanhoé Cambridge and Crédit Agricole Assurances have already indicated that they will take part in the capital increase. Gecina also plans to draw €500 mln of available credit lines.
The deal follows Gecina's challenge last year to Eurosic's takeover of French peer Foncière de Paris, when Eurosic saw off Gecina's bid.
'This operation is in line with Gecina’s strategy for development on the Paris real estate market and reflects our shareholders’ commitment to generating fresh momentum for the group,' concluded Gecina chairman Bernard Michel.
The agreement is subject to approval from the French competition authorities.
