Shareholder Hoang drops counter bid for French STE

French-Vietnamese investor Chuc Hoang has decided to drop his €344 mln counter bid for Société de la Tour Eiffel (STE), effectively paving the way for mutual insurer SMABTP's takeover of the French REIT.

In a statement to the French financial market watchdog AMF, Hoang's Eurobail investment vehicle said that it plans to exercise its right not to proceed with the bid, but did not specify whether it will tender its 30% stake to SMABTP itself.

Hoang launched a €55 a share bid for STE through his Eurobail company in early June, prompting SMABTP to raise its offer to €58 a share after earlier bids ranging between €48 and €53.

In late June, STE's board advised shareholders to accept mutual insurer SMABTP's €58-a-share bid for the company which values the group at €363 mln.

The SMABTP bid offers a higher price and a stronger guarantee of the continuation of the existing strategy than a rival bid from dissident shareholder Chuc Hoang, the board said at the time in an official statement.

SMABTP's latest offer of €58 is in line with the company's EPRA triple net NAV of €58.10 at year-end 2013. The offer is due to close on August 9.

Shareholder Chuc Hoang has been battling for control of STE for most of this year after having criticised STE's management and the company strategy, which focuses on value-add offices in the greater Paris region. He also questioned STE's decision in 2013 to acquire a Paris office building from UK private equity firm Patron Capital through a new share issue. Patron broke off talks shortly thereafter.

STE currently has a €701 mln portfolio of 393,360 m2, some 65% of which comprises Paris offices. If its bid is successful, SMABTP said it plans to double the portfolio within the next three to five years while providing liquidity to reduce the loan-to-value ratio.

SMABTP is the leading insurance group in France for the construction and public works sector.