Spain's Merlin takes control of Testa with further 25% stake buy

Spanish REIT Merlín Properties has announced the acquisition of a further 25% stake in Testa, the €3 bn property arm of Spanish construction giant Sacyr.

Merlin, which earlier this year agreed to pay €1.79 bn for the real estate unit, its largest acquisition since launching on the stock market in spring 2014, has bought nearly 39 million Testa shares for a price of around €860 mln.

The deal brings its interest in the office landlord to just over 50%.

An initial 25% stake was bought last month through a capital increase while a further 49.5% will be taken over in the autumn with the purchase of a further 76 million shares from indebted Sacyr for nearly €700 mln.

The merger between Merlin and Testa will create a property giant with assets of around €5.5 bn and gross rents of €290 mln. The portfolio will consist of just under 1,000 assets, largely offices in the major cities of Madrid and Barcelona.

In a statement to the stock exchange regulator, builder Sacyr recently said the deal significantly improves its financial position while helping it to develop its global strategic programme in the construction, infrastructure and services businesses.

CBRE Spain advised Merlin Properties on the deal.

Several bidders
Builder Sacyr reportedly received several offers for Testa, which had been put on the market over a year ago through investment bank Lazard. US private equity firm Blackstone, as well as local REITs Merlin and Hispania, and French listed investor Eurosic are all believed to have tabled offers for the property landlord.

Merlin said last month it had already made a preliminary non-binding offer for Testa. The Spanish REIT has been one of the most active buyers in the country over the past year. The company is managed by Magic Real Estate, the asset management firm headed by former RREEF executive Ismael Clemente. Merlin went public last year raising €1.25 bn in Spain's largest stock market listing in four years.