Ferrovial sells RE unit for EUR 2.2 bn

Spanish construction group Ferrovial has signed a preliminary agreement with peer Habitat for the sale of its real estate subsidiary Ferrovial Inmobiliaria. The company said in a press release at the end of December that the sale, with a total enterprise value of EUR 2.2 bn, will be completed this week. The value is constituted by EUR 600 mln of debts and EUR 1.6 bn of equity value.

The acquisition does not include Ferrovial's real estate activities in Poland, the company said. Ferrovial added that it aims at acquiring a 20% stake in the resulting Habitat Grupo Empresarial. Ferrovial's property unit provided a turnover of EUR 647.8 mln in the period January- September 2006.

On December 11, Spanish property firm Habitat launched a bid to acquire Ferrovial RE for about EUR 2 bn. Habitat had said it expected the acquisition to increase its revenues to more than EUR 700 mln. Luis Batalla also launched a bid of EUR 1.5 bn on November 7, 2006. Four companies arrived to the final stages of the bidding process, among them Lubasa and Habitat, but the negotiation between Lubasa and Ferrovial rapidly cooled off, according to sources close to the company.

Ferrovial is active in more than 40 cities, and it focuses on the residential sector. In 2005, with a turnover of EUR 813 mln, the company ranked third among the income sources of family Del Pino, manager of the group. The family was warned to sell Ferrovial's property unit after having acquired the world's largest airport operator BAA for EUR 18 bn.