Pirelli, Morgan Stanley get go-ahead for funds' bid

Gamma RE, a joint venture between Italian giant Pirelli Real Estate and Morgan Stanley, has received authorisation from Italian stock market regulator Consob for the publication of documents relating to public tender offers for the Tecla and Berenice funds. Both are closed-ended office real estate funds listed on the MTF segment of the Italian Stock Exchange and are managed by Pirelli. The acceptance period of the tender offer runs from 11 June to 2 July 2007.

The offers are for just over 550,000 quotas of the Tecla Fund, at a nominal value of EUR 447.79 per units, equal to the total quotas issued less the 12.83% equity investment already held by the vendor and the mandatory 2% stake held by Pirelli; over 548,000 quotas in the Berenice Fund, at a nominal value of EUR 497.55 per quota, equal to the total quotas issued less the 3.65% equity investment already held by the vendor and the mandatory 5% stake held by Pirelli.

Stakeholders accepting the offer will receive a cash payment of EUR 590 per unit in Tecla and/or a cash payment of EUR 540 per unit in the Berenice Fund . The total maximum amount of the offers comes to EUR 325 mln for Tecla Fondo Uffici and EUR 296 mln for Berenice Fondo Uffici. The offers are subject to Gamma RE achieving ownership of 50% of the quotas plus 1.

Banca Caboto (Intesa Sanpaolo Group) and Capitalia Banking Group will act as joint bookrunners. Morgan Stanley will serve as financial advisor and as bank for Gamma RE. Bonelli Erede Pappalardo, Studio Carbonetti and Chiomenti Studio Legale will act as legal advisors for the transaction. Pirelli has indicated it may seek a listing on either Euronext in Amsterdam or on the main market in London for the funds, which may ultimately hold EUR 1 bn in assets.

Pirelli has a 49% interest in Gamma RE. Morgan Stanley Real Estate Special Situations fund has a 51% stake.