French insurer mulls improved takeover bid for STE

French mutual insurance group SMABTP is considering an improved takeover bid for French REIT Société de la Tour Eiffel.

SMABTP said in a statement that it might put a further 10% on the table to take over Tour Eiffel, a Paris-based landlord with a €700 mln portfolio.

The French mutual insurance group made an initial €300 mln cash offer for the French REIT in late January. SMABTP offered €48 a share for STE, which compares to a price of €49.19 on the day prior to the offer. STE recommended shareholders to accept the offer at the time although it added that the bid did not 'sufficiently reflect the company's intrinsic value'.

'The board believes that a price increase would be in the interest of shareholders and will promptly consider the revised offer,' STE's board said in a statement.

SMABTP is France’s leading insurance group for the construction and public works sector.

The offer is conditional upon the tender of at least 51% of STE's share capital. SMABTP said, however, that it does not plan to exceed the 60% threshold required by French law for STE to maintain its tax-efficient REIT status, provided that they own less than 67% of the company’s capital at the conclusion of the tender offer.

Over the past three years, STE has been focussing on selling non-strategic assets to deleverage the business, which resulted in its loan-to-value ratio dropping from over 60% in 2010 to 47% at year-end 2013.

STE has been at the centre of a number of bids in the recent past. In October last year Patron Capital said it was in exclusive talks to swap an asset for an equity stake in the company. The private equity investor broke off talks later on when STE shareholder and businessman Chuc Hoang sought to take control of the company. The investor currently owns a 29% stake in the Paris-listed REIT through a number of companies including MI 29, Eurobail and Foncière Wilson.