Spanish REIT Merlin Properties has unveiled plans to launch a €1.03 bn capital raise just a few weeks after agreeing the €1.8 bn acquisition of Testa, the €3 bn property arm of Spanish construction giant Sacyr.
Spanish REIT Merlin Properties has unveiled plans to launch a €1.03 bn capital raise just a few weeks after agreeing the €1.8 bn acquisition of Testa, the €3 bn property arm of Spanish construction giant Sacyr.
Merlin said it will issue 129 million new shares, each with a par value of €1, plus a share premium of €7 per share, representing a total issue price of €8 for each new share. Merlin's shares closed at €11.50 on Wednesday, meaning the rights issue is taking place at a steep discount.
The operation follows a similar capital hike in May which saw Merlin raise just over €600 mln.
Under the terms of the new increase, existing shareholders will be entitled to subscription rights to two new shares, for every three they hold, the company said in a statement.
Merlin Properties' current market capitalisation is around €2.2 bn, making it Spain's largest traded real estate firm.
Last month the Spanish REIT emerged as the winner in the race to take control of Testa, the €3 bn property arm of Spanish construction giant Sacyr.
Merlín agreed to pay €1.79 bn for the real estate unit, its largest acquisition since launching on the stock market last year.
Under the deal, to be completed in phases, Testa has reduced its capital, paid an extraordinary dividend to shareholders and carried out a capital increase in which Merlín took an initial 25% stake.
This gives indebted Sacyr, which owns about 99.6% of Testa, an initial €238 mln, followed by another €1.55 bn when it sells its stake in Testa to Merlín.
