Riofisa backs EUR 2 bn takeover by Inmocaral

Riofisa is backing a EUR 2 bn takeover offer made by peer Inmocaral. At EUR 44.31 per share, the offer is 4.2% lower than Riofisa's closing price last Friday. The deal is expected to create the largest property company in Spain which, with a market value of EUR 14.846 bn, will place it ahead of Metrovacesa, currently valued at EUR 13.33 bn.

On January 19, the two real estate giants issued a joint press release stating that Riofisa's majority shareholder, the Losantos family, which owns 50.001% of the company's outstanding shares, had already accepted the offer. With a 20% stake Riofisa's second largest shareholder Caixa Catalunya also 'intends to sell its entire stake or a major part of it', according to sources close to the transaction.

From the notification of the bid to the Spanish market authority CNMV last Friday, Inmocaral has 90 days to present the takeover offer, said Spanish property newspaper Cinco Dias.

This is just the most recent of a series of acquisitions by Inmocaral in the last three months. The biggest deal was the EUR 3.5 bn takeover bid on Colonial, through which Inmocaral got a 93.41% stake in the property company. Acquisitions so far include the purchase of a 10.31% stake in Societe Fonciere Lyonnaise which added to 89.67% already controlled by Inmocaral in its French unit. At the end of 2006, Inmocaral also took over a 15% stake in the construction company FCC for EUR 1.534 bn. Its manager Luis Portillo, who is negotiating the entry in FCC's board, already heads Inmocaral, Colonial and SFL.

Riofisa's share price has gained almost 22% in 10 days from EUR 38.0 to EUR 46.25 and 5.1% on Friday after the publication of the offer. Its share value increased 361.76% in the last 12 months, reported property newspaper CincoDias.

Inmocaral's turnover comes 70% from the leasing of its 1.3 million m² mainly in Madrid, Barcelona and Paris. The remaining 30% is divided between developments and build-on plots. Its portfolio includes 3.2 million of m² in Andalucia, Catalunya and Madrid.

Riofisa is a leading shopping centre promoter listed on the stock market about six months ago. Since then, its share value has increased by a 142% compared to its reference value of EUR 18 per share. The company has more than 25 logistics and office sites under development in the Spanish capital. Riofisa is also very active in Bulgaria, where it has three projects valued at more than EUR 600 mln.