Gecina to launch mandatory offer for Gecimed

Listed French property group Gecina is to launch a mandatory public offering for the shares of its former majority owned medical property subsidiary Gecimed after GE Real Estate sold its 20% stake.

Gecina announced on 29 December that it had signed an agreement with ISM, a subsidiary of GE Real Estate France, to purchase just over 5.5 million shares, representing 9.4% of Gecimed's share capital, in an off-market block transaction. The price was EUR 3.87 mln, or 70 euro cents per share. Gecina already held 38.6% of Gecimed's shares.

GE Real Estate, part of GE Corporate Finance, signalled last year that it was shifting its focus away from property equities to real estate debt and financing.

ISM, which owned 19.13% of Gecina's share capital, entered into agreements to sell 2.7 million shares, 4.61% of Gecimed's total share capital, to Scor Global P&C SE and just over three million shares, or 5.13%, to Royal Bank of Scotland CBFM Netherlands.

Gecina said that it would soon file a draft mandatory tender offer to acquire all Gecimed shares. The move is dictated by French stock exchange regulations as Gecina controls over 33.3% of the share capital and acquired more than 5% in one transaction. A spokesperson said Gecina intends to stay in the medical property business and the acquisition of the shares from ISM was an indication of this.

Both Gecina and Gecimed are French real estate investment trusts, or SIICs. In 2006 Gecina acquired 94% of the shares in Paris-listed medical real estate investor Sofco, which it renamed Gecimed. A short time later Gecina placed about 60% of Gecimed's share capital with financial investors - ISM took just under 20%; RBS-CBFM Netherlands 18.63%; Scor Global P&C 10.50% and LB UK RE Holdings (Lehman Brothers Group) 10%.

Gecimed owns clinics, hospitals and housing for dependent elderly residents. The company's portfolio comprised of 33 assets at end-June 2008. Gecina's 38% share in Gecimed's portfolio is valued at EUR 251 mln.