Spain's Realia sells majority stake in SIIC de Paris

Realia, which is controlled by Spain's FCC and lender Bankia, has agreed to sell its 59% stake in SIIC de Paris at €22 per share to Eurosic.

Spanish real estate group Realia said on Tuesday that it has reached an exclusive agreement with French listed investment group Eurosic to sell its stake in real estate investment trust SIIC de Paris, in a deal to be closed by June 6.

The €22 offer compares to a closing price of €19.19 for SIIC de Paris shares on the day prior to the launch of the offer. In total, Eurosic will invest around €560 mln to buy the stake, in a deal which values SIIC de Paris at around €950 mln.

SIIC de Paris posted a net profit of €15 mln in 2013 and rental revenues of nearly €70 mln. The company has a low loan-to-value ratio of 30% and a portfolio valued at just over €1 bn largely consisting of commercial properties in Paris.

Eurosic, a real estate investment trust focused on value-add transactions, plans to take control of SIIC de Paris and launch a tender offer for all of the company once the acquisition is finalised. Société Fonciere Lyonnaise is the second largest shareholder in SIIC de Paris, having bought a nearly 30% stake in the company in 2010.

Realia's disposal is part of a strategy by its owners to facilitate the sale of the property company. Realia's shareholders FCC and Bankia have been looking to split the company into the French and the Spanish businesses to make it easier to find a buyer.

Orion Capital Managers and AEW Europe have reportedly been selected as the final bidders for the stake in Realia. Bankia owns 25% in Realia while FCC controls 36.9%.

SIIC de Paris is the latest French real estate investment trust to change hands. French mutual insurance group SMABTP is looking to buy a major stake in French REIT Société de la Tour Eiffel while a Qatari investor has recently acquired an 8.55% stake in SFL from Credit Agricole Corporate & Investment Banking.