Construction firm FCC, which is majority owned by Mexican billionaire Carlos Slim, has cancelled the sale of its 37% stake in Spanish listed firm Realia. The move jeopardises the bid by Spanish REIT Hispania to gain control of Realia.
Construction firm FCC, which is majority owned by Mexican billionaire Carlos Slim, has cancelled the sale of its 37% stake in Spanish listed firm Realia. The move jeopardises the bid by Spanish REIT Hispania to gain control of Realia.
Majority owned by FCC and bailed-out lender Bankia, Realia had been on the market for around a year and received an offer Hispania in November, valuing it at €150.6 mln.
FCC shareholding structure changed radically in late 2014 when Slim acquired a 25.63% stake. Now FCC has said that it no longer wished to sell the Realia shareholding due to a change 'in its policy of asset disposals'.
Realia's shares rose nearly 20% after the announcement.
Hispania, one of Spain's first generation of REITS, launched a €151 mln takeover offer in November for the indebted Madrid-based developer after reaching an agreement with the company's creditors.
Hispania offered €150.6 mln, or €0.49 per share, for Realia, representing a 28% discount to the trading price of Realia shares before the announcement and a discount of roughly 50% to the average price of €1.1 a share held in November.
As part of the deal, Realia said it would raise about €800 mln of new capital to repay part of a syndicated loan signed in 2009 and maturing in 2016, which is now held by creditors including Goldman Sachs Group, Fortress (through the Aneto unit) and King Street (Puffin Real Estate).
The bid is conditional upon acceptance by at least 55% of Realia's shareholders and includes debts of over €1.08 bn. Without FCC's backing, Hispania would need all the support it can get from Realia's other shareholders to pull off the deal, which seems difficult given the level of discount the bid implies.
Under the terms of the offer, existing Realia shareholders will be invited to participate in the capital increase, and any shortfall in the offer would be covered by creditors to convert their remaining loans into Realia stock, according to the statement.
Hispania also said at the time that it had reached an agreement with creditors to buy 50% of the loan for €313 mln pending a successful takeover bid. In total, it was planning to invest between €393 and €470 mln to take a 50 to 58% stake in Realia, which it said would remain listed.
Hispania went public on the Spanish stock exchange in March 2014, raising €550 mln. It is externally managed by Azora and counts international investors such as John Paulson and Moore Capital as well as Dutch pension fund APG among its shareholders.
Realia owns a 420,000 m2 commercial portfolio, consisting largely of office buildings including Torres Kio in Madrid and Torre Realia BCN in Barcelona. The Bankia Group owns 25% of Realia and Barcelona-based construction company Fomento de Construcciones & Contratas holds about 37%.
The two shareholders announced in late 2013 that they had hired Goldman Sachs to sell their stake in Realia.