Metrovacesa looks at possible merger

Spanish property company Metrovacesa is looking at several foreign real estate companies for a possible merger by the end of 2008 or beginning 2009, CEO Jesús García de Ponga told Spanish newspaper La Razón. De Ponga said that Metrovacesa is studying six or seven companies with a gross asset value of between EUR 1 bn to EUR 7 bn. The company's chief executive also said Metrovacesa plans to invest up to EUR 5 bn in the next three years. 'We will get EUR 2.5 bn from asset sales and the rest from mortgaging real estate', De Ponga said, adding that that the advantage of the group is having funded most of its growth with corporate debt and not mortgages. De Ponga also said the group will be looking at projects in the Netherlands and Germany and hinted that the next acquisition is likely to be a real estate portfolio in Germany.

Last month the company was rumoured to be eyeing Dutch-listed property company Vastned Retail. The Dutch fund is expected to make an announcement next month regarding the bids it has received. Late last year, Vastned turned down a hostile EUR 1.15 bn bid from IEF Capital, a joint venture of Bouwfonds Asset Management and Inflation Exchange Fund (IEF) but decided to open up its books for due diligence to interested parties. Vastned Retail has a property portfolio worth some EUR 2 bn mostly in the Netherlands (35%), Spain (27%), France (22%), Belgium (14%), as well as Turkey (1%) and Portugal (1%).