Italy's Prelios studies merger with Fortress

Italian property services firm Prelios has signed a memorandum of understanding with Fortress Group for the integration of their real estate asset management and NPL platforms.

'Contacts were made with the well-known private equity group Fortress, the majority shareholder of the companies Torre Sgr and Italfondiario, with the purpose of evaluating the feasibility of a possible integration with Prelios Group,' the Milan-listed firm said in a statement.

The agreement envisages the possible merger between asset managers Prelios Sgr and Torre Sgr as well as between their respective NPL platforms, Prelios Credit Servicing and Italfondiario.

Prelios had been in contact with the UK arm of US asset manager Fortress Investment Group since autumn 2012, when the group was believed to have put €100 mln on the table to strengthen Prelios' capital structure.

The offer was, however, outbid by local investment firm Feidos which later on took a stake in the company as part of a major capital injection.

Despite a recent capital increase, Prelios may need a new capital injection in the near future, as it continues to struggle with a difficult market at home. The company saw consolidated revenues shrink to €73 mln in 2013 from €86 mln in 2012. Its net loss widened to €333 mln last year, from a loss of €242 mln a year earlier.

The company managed €6.3 bn of assets at year-end 2013.