Testa, a €3 bn Spanish property company, has announced plans to adopt tax-efficient REIT status ahead of a planned merger with peer Merlin Properties.
Testa, a €3 bn Spanish property company, has announced plans to adopt tax-efficient REIT status ahead of a planned merger with peer Merlin Properties.
Testa, formerly the real estate subsidiary of construction Group Sacyr, will hold an extraordinary shareholder meeting on September 28 to approve the conversion to the REIT regime.
The move is one further step towards the takeover of Testa by Merlin Properties, another REIT managed by Magic Real Estate, the asset management firm headed by former RREEF executive Ismael Clemente.
Merlin currently owns 77% of Testa after agreeing to buy Testa in phases earlier this year for €1.8 bn. It bought an initial 25% stake through a capital increase and committed to pay a total of €1.8 bn to take full control of the real estate unit, its largest acquisition since launching on the stock market in spring 2014.
In July Merlin acquired a further 25% interest and another 27% earlier in August.
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.
Closing of the takeover is expected to take place by June 2016.
