French retail group Casino has sold a portfolio of 25 properties to its majority-controlled property arm Mercialys for EUR 334 mln. The portfolio consists of 25 assets to be completed during 2009 and 2010, and comprises four distinct asset classes: three shopping centers in Besançon and Arles, which are already let and will be completed in the first half of 2009; seven extensions of shopping centres in advanced development stage; 10 hypermarkets which Mercialys will transform into shopping centres and five hypermarkets and supermarkets located in urban areas. The assets generate an annual rental income of EUR 23.9 mln.
French retail group Casino has sold a portfolio of 25 properties to its majority-controlled property arm Mercialys for EUR 334 mln. The portfolio consists of 25 assets to be completed during 2009 and 2010, and comprises four distinct asset classes: three shopping centers in Besançon and Arles, which are already let and will be completed in the first half of 2009; seven extensions of shopping centres in advanced development stage; 10 hypermarkets which Mercialys will transform into shopping centres and five hypermarkets and supermarkets located in urban areas. The assets generate an annual rental income of EUR 23.9 mln.
Mercialys said the transaction price represents an 11% discount to the properties' appraised value. The deal reflects a yield of around 7.2%. The acquisition of the real estate assets will be paid with 14.2 million newly issued Mercialys shares valued at EUR 23.5 per share, representing a 7% discount to Mercialys' opening share price on Thursday.
'This contribution is in line with the partnership strategy developed between Mercialys and Casino. It demonstrates Mercialys' ability to generate within the Partnership Agreement with Casino, new sources of growth and value creation that will continue to materialise in the future,' the company said in a statement.
Overall, the transaction is expected to double the growth targets set by the company's management for 2009, Mercialys said. Following the deal, Casino will hold a 50.4% stake in Mercialys (share capital and voting rights). Mercialys will maintain its SIIC status.
Jacques Ehrmann, Chairman and Chief Executive Officer of Mercialys, stated: 'This transaction represents a significant acceleration of the growth of the company, while retaining its unique debt-free financial structure.'
The company said its major institutional shareholders, Generali, AXA and BNP Paribas Assurances are supporting the transaction, which is expected to complete by mid-June.
