Three institutional shareholders have decided to back Eurosic's offer for Foncière de Paris instead of Gecina's, effectively paving the way for a merger between the two smaller REITs.

French insurance company Covea, which holds about 30% of FdP, said it preferred property group Eurosic's bid over the 10% higher cash offer from Gecina. Covea also holds a near-22% stake in Eurosic.

Similarly, shareholders ACM and LaTricogne said they would tender their shares to Eurosic, in a decision which will potentially result in Eurosic holding at least 73% of Foncière de Paris' capital.

French REIT Eurosic has already built up a 27% stake in FdP, which owns a €2.6 bn portfolio focused on prime assets in central Paris and the Western Crescent. The company launched a public tender offer of €136 a share for the group back in April.

At the time, shareholders Allianz, The Conservateur and Generali also said they would tender their shares to Eurosic's bid but they have yet to confirm their commitment following a counter-offer made at end May by French listed office property group Gecina.

Gecina is offering €150 a share for the office landlord, valuing FdP at about 10% more than Eurosic. Alternatively, the company is offering six Gecina shares for every FdP share, or a 12% premium on Eurosic's offer.

Both offers have their merits as they reflect different business projects, Eurosic said.
 
'Our offer is part of the continued growth dynamics experienced by Eurosic for five years,' said Perchet Yan, CEO of Eurosic. 'During this period we have built portfolios and teams by focusing on three strategic pillars: Parisian office buildings that offer security and sustainability, restructuring operations, also in Paris, which provide a strong element of value creation and finally secure performance of assets in major regional cities and in the health and leisure sectors.'

He added: 'It is this business plan that we offer to the shareholders of FdP. We offer them [the opportunity] to become shareholders of a company resulting from a merger of equals, always centered on Paris offices, with a significantly improved performance.'

A merger between Eurosic and Foncière de Paris would create a combine with a portfolio valued at over €5 bn, 85% of which located in Paris.

'The merger should be facilitated by the fact that companies of comparable size and teams share the same business vision,' Eurosic added.

Gecina, a much larger REIT, said that FdP's assets are ‘highly complementary with Gecina’s, offering access to central and attractive areas of Paris (notably the 6th, 7th, 9th and 10th districts) where Gecina currently has a limited footprint'.

Gecina's offer is conditional upon an acceptance level of over 50% of FdP’s share capital and voting rights.