Eurosic's offer for Foncière des Paris is more likely to succeed despite the higher terms offered by rival Gecina, according to an evaluation carried out by independent experts as well as by Foncière des Paris' supervisory board.
Foncière de Paris, which was due this week to publish a reasoned opinion on both offers, admitted that Gecina's offer is financially superior to Eurosic's also warning that 'the low liquidity of Eurosic's stocks could make the compensation in shares less attractive'.
'After the evaluation of the tenders, the Ad Hoc Committee considered unanimously that Gecina's offer is in the interest of the company, its shareholders and its employees,' Foncière de Paris said.
However, the company pointed to the 50% shareholding minimum set by Gecina for the offer to go ahead as a potential issue, given that Eurosic has already received backing from a number of major FdP shareholders.
French insurance company Covea, which holds about 30% of FdP, confirmed in early June that it preferred property group Eurosic's bid over the 10% higher cash offer from Gecina. Covea also holds a near-22% stake in Eurosic.
Similarly, shareholders ACM and LaTricogne said they would tender their shares to Eurosic, in a decision which will potentially result in Eurosic holding at least 73% of Foncière de Paris' capital.
Eurosic on the other hand did not set a minimum threshold for the offer to go ahead.
Moreover, the supervisory board noted, Gecina's offer still needs to be approved at the company's extraordinary general meeting on 27 July. Finally, Gecina's shares have experienced a modest decline since the result of the Brexit referendum on June 23, while the value of Eurosic's shares has largely remained stable.
'However,' the board added, 'assuming that Gecina's offer will not reach the shareholding minimum, those shareholders who tried to contribute their shares to Gecina, may benefit from the reopening of Eurosic's offer'.
French REIT Eurosic has already built up a 27% stake in FdP, which owns a €2.6 bn portfolio focused on prime assets in central Paris and the Western Crescent. The company launched a public tender offer of €136 a share for the group back in April.
Two shareholders, The Conservateur and Zurich VG have said they would tender their shares to Gecina after having initially backed Eurosic's offer.
Gecina is offering €150 a share for the office landlord, valuing FdP at about 10% more than Eurosic. Alternatively, the company is offering six Gecina shares for every FdP share, or a 12% premium on Eurosic's offer.
A merger between Eurosic and Foncière de Paris would create a combine with a portfolio valued at over €5 bn, 85% of which located in Paris. The group would focus on office, healthcare and leisure assets.
Gecina, a much larger REIT, said that FdP's assets are ‘highly complementary with Gecina’s, offering access to central and attractive areas of Paris (notably the 6th, 7th, 9th and 10th districts) where Gecina currently has a limited footprint'. The company would solely focus on offices.
