Strong words have been exchanged between French listed property company, Altarea, and Primonial in the apparent breakdown of a corporate deal between the pair.
Altarea announced last summer that exclusive negotiations had begun with its French counterpart over acquiring a majority stake in a deal valuing Primonial at €1.9bn.
Altarea was expected to buy 60% of Primonial in the first quarter of this year.
However, in a bombshell announcement on Wednesday morning, Altarea said it had realised that some of the conditions agreed upon at the time of signing terms in June 2021 have not been met in terms of ‘substance, form, and timing.’
The company expressed its strong disapproval of the lack of progress over its attempts to take full control.
The company said: ‘As part of the pre completion work, of which various documentation have been communicated only on February 25, Altarea realised that some of the conditions agreed upon at the time of the signing of the SPA in June 2021 were not met.’
‘Altarea deplores this situation and will therefore not be able to complete the acquisition of Primonial as agreed with a sufficient level of legal security. Altarea will do everything in its power to assert its rights and protect its interests and those of its shareholders.’
The company added: ‘Altarea's outlook remains very positive in each of its business lines, as evidenced by the Group’s excellent 2021 financial results. The group has a healthy financial position and significant resources to finance its next growth cycle.’
Primonial statement
However, Altarea's statement drew a stinging rebuke from Primonial.
Noting what it called Altarea's decision to 'abandon' its acquisition, the firm hit back with details of the talks.
'While the sale of the Primonial group, in the set-up negotiated and announced last July, was scheduled for today, the Altarea group has announced to us on February 28th, unilaterally, that it will not proceed with the acquisition.'
The full response can be read below, including how cancelling the completion of the transaction was 'inconceivable' and containing a legal threat.
'The reasons given are essentially a "delay in the transmission of the documentation and figures relating to the operations prior to the closing".
'This transaction, particularly complex given the ambition to simplify the current shareholding structure of the Primonial group at closing, required the completion of a very large number of transactions (mergers, capital increase, capital reduction, etc.) within the very tight deadlines that were jointly set last July at the time of the signing.'
'It is therefore inconceivable to question its completion only two days before closing for this reason alone, when all the conditions precedent were met. We are extremely surprised by this unilateral decision of the Altarea group.'
'The internal teams and consulting/law firms of both parties have been working hand in hand for many weeks with a real desire to succeed. The press conference held at the end of last week to announce Altarea's 2021 results confirmed that the acquisition of the Primonial group was due to take place in the coming days.'
'As a consequence, we will have the buyer's failure to meet his obligations established by all legal means.
'We remain convinced that this project made a lot of sense and that it would have created significant synergies for our two groups in the long term', says Stéphane Vidal, CEO of group Primonial.
'The Primonial group has never been so strong, united and forward-looking, and is recording historic financial results. Our organisation, our teams, our capacity to innovate and our great reactivity make of the Primonial group a very engaging and successful company. More than ever, we are proud of what we have achieved, and we defend these strong values that have made our history and will continue to do so for a long time.'
'It is the role of the group's management to guarantee this. The group's shareholder, management and teams are more than ever committed to writing Primonial’s glorious history. Organic growth is certain, development projects are numerous, and our ambition is intact. I would like to take this opportunity to congratulate and thank all our in-house teams and our advisors for their know-how, their expertise and their outstanding commitment.'
