French REIT Eurosic is taking majority ownership of peer Foncière de Paris (FdP) after a takeover battle to create a combined group with €6.7 bn of real estate assets.
Eurosic's share of the portfolio will be €5.8 bn. This is based on the announcement by French financial regulator AMF on Eurosic's tender offer for FdP's shares.
AMF has released the provisional results of the tender offers for FdP shares, reporting that 5.2 million shares, representing 50.1% of FdP’s capital, plus 0.5 million of Foncière OSRA shares (mandatory convertible securities) were tendered in response the Eurosic offer.
Eurosic will hold almost 76.70% of FdP's share capital, triple the shares owed by Eurosic prior to the offer. The result, if confirmed, means that Eurosic has seen off an attempt by Paris-listed Gecina to take control of FdP.
In accordance with stock market regulations, the Foncière shareholders who have not tendered their shares will have the opportunity to do so in the context of an offer reopening, the dates of which will be published shortly.
'This result demonstrates the confidence of the shareholders of Foncière de Paris, both institutional and private, in our project, and we thank them for giving us or renewing their support after this long stock transaction. Now we can continue the strong momentum of growth and yield that Eurosic has known since 2011,' said Perchet Yan, CEO of Eurosic.
The move creates a combination with a portfolio valued at €6.7 bn, with Eurosic owning €5.8 bn, with an additional 15 developed projects, valued at €1.2 bn. Eurosic said that the transaction would enable the firm to become a major player in the office real estate sector in the Paris region. Properties located in Paris and in the Paris region account for 85% of the two company's consolidated assets.
Foncière de Paris’ gross asset value amounts to €2.6 bn, predominantly comprising offices located in Paris, Boulogne and Levallois. Eurosic said that its asset base represented a complementary fit with its own assets, particularly in the capital. Foncière de Paris’ assets are mostly located in the 6th and 7th arrondissements and in the east of Paris, whereas Eurosic's are located in the 8th arrondissement and the west of Paris.
Foncière de Paris' occupancy rate was 97% at end 2015, compared with 93% for Eurosic, implying a combined occupancy rate of 95%. The residual term of the leases of the combined entity would be maintained at around five years.
Nicolas Ruggieri, managing director of Eurosic, added: 'The complementary teams of Eurosic and Foncière de Paris will be the main success factor in the future for the group. Based on strong business skills, and strengthened by diversified experience, we are very confident to continue our growth and continue to develop our business plan.'
