New French REIT Foncière de Paris has unveiled plans to take over smaller peer Foncière des 6ème et 7ème arrondissements in a merger that will create a Parisian office landlord with around €3 bn of assets.
New French REIT Foncière de Paris has unveiled plans to take over smaller peer Foncière des 6ème et 7ème arrondissements in a merger that will create a Parisian office landlord with around €3 bn of assets.
The merger has already been approved by both companies' boards, but has yet to be endorsed by shareholders who will vote on it in May next year.
The companies have yet to decide the exchange ratio for the merger, but have proposed a ratio of 0.15 to 0.20 FdP share for each Foncière des 6ème et 7ème share.
FdP's 17.6% stake in Foncière des 6ème et 7ème would be cancelled after the merger, boosting earnings per share. The operation would also improve liquidity of the stock, with the new combine expected to have a free float of around 20% and a market capitalisation of around €1 bn.
'The transaction aims to enable the two listed companies to [...] strengthen resources to ensure the long term development in the same category of assets,' FdP said in a statement.
The operation would also simplify the ownership structures of the two companies, which have shareholders in common. Covéa currently holds 28.4% of FdP and 26.8% of Foncière des 6ème et 7ème. Allianz owns 17.2% of FdP and 26.5% of Foncière des 6ème et 7ème.
On completion of the deal, the group would still be owned by the same insurance companies, FdP said, with no investor envisaged to surpass a 30% threshold.
The new combine would own a €3 bn portfolio located mostly in Paris and the western suburbs of Boulogne-Billancourt and Levallois-Perret. Its loan-to-value ratio would be a moderate 46%, for a total net debt of €1.1 bn.
FdP was formed last year with the merger of Cofitem-Cofimur and Foncière Paris France.