Gazit-Citi jv completes EUR 800m takeover of Meinl

Tel Aviv-listed Gazit Globe and Citi Property Investors have completed the EUR 800mln takeover of CEE retail property specialist Meinl Land (MEL) and changed its name to Atrium European Real Estate.

Gazit Globe said the CPI/Gazit joint venture provides it an 'established footprint' in the Central & Eastern European real estate market, where the company sees 'significant growth opportunities'.

The takeover marks the culmination of a strategic review MEL launched last September after allegations the company had not given clear information about a share buyback scheme. CPI/G has appointed a new board, headed by Gazit chairman Chaim Katzman. The new CEO Rachel Lavine will lead Atrium's new internalised management structure. Gazit said the new board and management will be committed to 'ensuring the Atrium's corporate governance procedures are of best practice international standards'.

The joint venture has agreed to provide up to EUR 800mln of new investment into Atrium, comprising a subscription for EUR 500 million of convertible securities was completed at closing of the transaction. An additional EUR 300mln rights issue to Atrium shareholders, will be underwritten by CPI/G within six months of the closing. In addition, CPI/G has received 30 million warrants as part of the transaction.

Atrium owns 162 properties, mainly shopping centres and land reserves, in 11 countries in Central and Eastern Europe with a fair market value of EUR 1.9bn.The company also owns 34 properties under development and redevelopment with a total value (including cost to complete) estimated at approximately EUR 3.3bn. The portfolio comprises 1.6 million m² of gross lettable area under development and redevelopment, as well as 11 land parcels for future development of 1.9 million m².