Dubai Firm Makes Share Buyout Offer for Spain’s Colonial

The Spanish stock market regulator suspended shares of real estate firm Inmobiliaria Colonial SA today, before sovereign wealth fund Investment Corporation of Dubai announced that it was interested in buying at least 50.1 percent of the firm, Reuters has reported. The price would be U.S.$2.74 per share, in cash or U.S.$3.33 per share in financial instruments. Overall, this values the Spanish company at approximately U.S.$4.5 billion.The deal will bring clarity to Spain’s commercial real estate market, which has had an overall lack of confidence in Colonial, Andres Escarpenter, CEO of Jones Lang LaSalle Inc.’s Spanish operations, told CPN today. “There has been a lot of doubt towards the company,” he said, noting management shakeup, troubled shareholders and industry talk of Chapter 11. “This could only be good news for the market.” The offer price would be paid in either cash or financial instruments issued by ICD, the fund said, and would be subject the approval of creditor banks. ICD said it would offer zero coupon financial instruments, maturing in 4.5 years, to pay for the majority of the bid, media reports noted. It was reported earlier this month that two major holders of Colonial shares, former chairman Luis Portillo and the Nozaleda family, might sell to ICD if asked. The two shareholders account for approximately 52 percent of the company. Colonial also had interest from GE Real Estate Iberia and the French Gecina. Reports noted that any deal would need approval from firms that have lent the indebted Spanish firm money, including Calyon, EuroHypo, Goldman Sachs and the Royal Bank of Scotland. The two shareholders have 48 hours to accept the bid, while the creditors have five days to accept, reported Thomson Financial. If the offer is successful, ICD will launch a full bid for the remaining shares in Colonial. Trade suspension will be lifted this afternoon.