Realia may cut IPO price by 20%, Confidencial says

Realia may cut the share price of its initial public offering (IPO) by around 20% because of weak institutional demand, Spanish news website El Confidencial has claimed. Realia, jointly owned by Spanish savings bank Caja Madrid and construction company FCC, may see its share price range reduced from EUR 7.90 - EUR 9.70 to EUR 6.50 - EUR 7.20 a share. At Kempen & Co's European property seminar in Amsterdam last week, Inmobiliaria Colonial said it was considering launching a bid for Realia.

Realia, currently active in Spain, France, Portugal and Poland, will look at acquisitions in other parts of Europe once the IPO is completed. The commercial property company is placing about 44% of its share capital on the market at a maximum price for retail investors of EUR 8.8 per share. Chairman Ignacio Bayon said that the two majority shareholders have agreed to retain 51% of the company for the next five years. Foreign investors are being offered about 52% of the remaining shares, local funds 16% and retail investors 32%. JPMorgan and Caja Madrid are acting as global coordinators for the listing.

Last year, Realia took over SIIC Paris for about EUR 800 mln. From 2009, Realia will not be allowed to own more than 60% of the French real estate investment trust (SIIC) if it wants SIIC Paris to retain its SIIC status.