Icade, the Paris-listed developer and investor, confirmed on Tuesday that it has taken control of smaller peer ANF Immobilier through the purchase of Eurazeo’s 50.5% interest in the firm.
Icade and ANF, both SIICs or French real estate investment trusts, initially announced their intention to merge in July as they published their results for the first half of 2017. Icade signed exclusivity with Eurazeo earlier this month.
Under the deal, the latest example of consolidation in the listed French real estate sector, Icade paid €22.15 per ANF Immobilier share, representing a total investment of about €213 mln for the 50.5% stake. A mandatory offer for the remaining ANF shares will follow in November, with a potential merger of the two businesses envisaged for next year.
The offer price reflects a premium over ANF's trading price of 5% based on the closing price on 21 July 2017, the day before the announcement. It values ANF at around €409 mln.
The deal was conditional on the sale by ANF Immobilier of a €400 mln residential and retail portfolio in Marseille and Lyon to French asset manager Primonial. This sale has also been completed.
ANF Immobilier currently owns a portfolio valued at €457 mln primarily consisting of office buildings in Lyon, Marseille, Toulouse and Bordeaux. The yield on the properties stands at 5.8%.
Icade, part of Caisse des dépôts Group, said that the transaction is part its strategy to diversify its portfolio and expand in the main regional cities, with a target of 5% of property assets outside the Paris region. As a result of the deal, Icade’s portfolio increases from €9.9 bn to €10.3 bn, of which €4.6 bn of offices. The deal also allows Icade to acquire a €194 mln development pipeline, with a forecast yield on cost of 6.7%, the company added.
Olivier Wigniolle, CEO of Icade, commented: 'Acquiring a controlling stake in ANF Immobilier will enable Icade to step up the implementation of its strategic plan and grow its development pipeline. This acquisition will create value for Icade and its shareholders.'
The transaction, which is being financed with debt, will have a maximum impact of about +3% on Icade’s loan-to-value (LTV) ratio, which stood at 39.4% as of June 30, 2017.
