French property group Foncière des Régions has announced a major restructuring of its subsidiaries as part of plans to simplify its organisational structure and make it more attractive for equity investors.
Under this strategy, FdR plans to take its residential unit private while its two hotel units will be merged in one platform.
In a statement on Monday, FdR said it has signed an agreement with the shareholders of Foncière Développement Logements to acquire their stakes in the residential unit and take the company private.
Shareholders Cardif, Crédit Agricole Assurances and Generali Vie, which together own 38.6% of FDL, will be paid both in cash and in FdR shares, with the deal due to close by end-November. The cash payment has been set at €4.65 per FDL share and represents 30% of the total. The share payment will reflect a ratio of one FdR share for 20 FDL shares.
The deal reflects an overall valuation of the FDL share of €4.21, representing a 9.5% discount on the company's NAV at end-June 2017.
Following the deal, FdR will own 99.8% of FDL and will launch a public repurchase offer in November 2017 followed by a squeeze-out.
Foncière Développement Logements owns 129 assets, almost exclusively residential units, valued at €371 mln at end-June 2017, 82% of which are located in the Paris region (48% Paris and Neuilly-sur-Seine), Lyon and Marseille.
Hotel merger
Meanwhile, the company is moving forward with plans to merge its two hotel investment structures – Foncière des Murs and FDM Management, which together own a €4.3 bn portfolio with over 42,000 rooms.
FDM Management, an operating company, 40.7%-owned by Foncière des Murs, will be combined with FdR's 50%-owned unit, Foncière des Murs, on the basis of their Triple Net NAV at the end of June. With this transaction, which is expected to be finalised in early 2018, Foncière des Régions will own 42% of its merged hotel arm.
