Bloomberg
PARIS
— Metrovacesa, Spain’s biggest real estate group, offered à5,5bn for France’s Gecina to boost its rental business.Metrovacesa would pay à89,75 a share for a 30% stake in Gecina held by French insurers Assurances Générales de France and Azur-GMF, it said yesterday.
The Madrid-based company will pay remaining shareholders the same price, or
à87,65 a share, depending on when the transaction closes.
Chairman Joaquin Rivero announced plans this month to spend as much as à7bn on acquisitions in countries including France, where property companies have tax breaks similar to real estate investment trusts in the US.
Last year Metrovacesa tried to buy Société Foncière Lyonnaise before being outbid by Spanish competitor Inmobiliaria Colonial.
"French property companies have attracted a lot of interest because of higher real-estate prices and because they’ve switched to tax-exempt trusts," said Laurent Vallee, a fund manager at Richelieu Finance in Paris, which oversees $2,2bn.
The offer price for the 30% stake is 14% higher than Monday’s closing price for Gecina stock of à78,75.
Trading in Metrovacesa and Gecina shares was suspended in Madrid and Paris.
The share price of France’s Unibail, continental Europe’s largest real estate company, had its biggest gain in five months, rising as much as 4,7%.
Metrovacesa said the transaction would be the biggest takeover to date in the European real-estate industry.
France alone has seen $8,8bn in mergers in the past two years.
As well as Colonial’s purchase of Foncière Lyonnaise last year, General Electric unit GE Real Estate paid à1,5bn for a majority stake in Sophia, which owns buildings on Paris’s Champs Elysées.
Foncière des Régions agreed to buy Bail Investissement and Foncière des Murs.
Gecina, founded in 1959, has property holdings valued at à8,4bn, according to its website.
The company doubled the value of its property business in 2002 when it bought rival Simco SA for à2,3bn.
The company said last month that profit before tax rose 23% last year, boosted by cost savings from the Simco takeover.
Net income fell 67% to à174,8m, after a tax credit was not repeated.
Metrovacesa will quadruple its rental assets with the acquisition, increasing its income from recurring businesses.
Publisher: Bloomberg
Source: Business Day
