Icade, the Paris-listed developer and investor, is to acquire its smaller peer ANF Immobilier in the latest example of consolidation in the listed French real estate sector.
Icade and ANF, both SIICs or French real estate investment trusts, announced the move as they published their results for the first half of 2017.
Icade is to acquire the majority stake in ANF, held by French investment company Eurazeo in a deal valued at €490 mln. A mandatory offer for the remaining ANF shares will follow. Both offers will be priced at €22.15 per share.
The offer price reflects a premium over ANF’s trading price of +5% based on the closing price on 21 July 2017. Eurazeo has entered into talks with Icade in regard to selling its holding of 50.48% of ANF shares on those terms.
By mid-morning on Tuesday ANF's shares were trading at €21.98.
Deal parameters
The share sale is subject to ANF successfully selling real estate assets in Marseille, designated as the Legacy Portfolio, to French firm Primonial Real Estate Investment Management for €400 mln.
ANF current manages a diversified portfolio of French office, retail, hotel and residential assets valued at €1 bn.
The company is undergoing a transformation to focus on commercial real estate in 'large, dynamic regional cities'.
Underlining the pressure for change, ANF announced an IFRS loss of €97 mln (+ €6 mln EPRA) for the first half of 2017, and a 5% decline in gross rental income under IFRS of €24.4 mln, compared to H1 2016.
ANF said the drop was mainly due to the challenging conditions in Marseille, but added this would gradually be offset by activities elsewhere.
'This dual operation, alongside Icade, a leader in its sector, will enable ANF Immobilier to embark on a new chapter in its history,' said ANF supervisory board chairman Bruno Keller.
'The two disposal projects will give it the resources to accelerate its growth strategy, resolutely oriented towards commercial real estate based in dynamic regional cities, and to approach this new stage in its development with confidence, within the context of industry concentration,' Keller added.
M&A wave
Icade has €9.9 bn of assets under management. About 80% of the total comprises French offices, business parks and other commercial property assets. Healthcare property accounts for the remainder.
The company reported EPRA earnings of €146 mln, up 7% on the same period last year.
The planned acquisition of ANF is the latest in a number M&A moves completed or announced in the French real estate sector this year.
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