AMSTERDAM France's Unibail Holding UNBP.PA
has agreed to buy Dutch group Rodamco Europe RDMB.AS to
create Europe's biggest listed property company, with 95
shopping centers in 14 countries, the two firms said on
Unibail will offer 0.53 of its common shares for each
Rodamco common share -- a 15 percent premium to Friday's
closing share prices. The offer period will begin in early May
and close in early June.
The combined company, which is to be renamed, will have a
market value of about 22 billion euros ($29.4 billion).
Rodamco shares rose 10.7 percent to 120 euros by 1017 GMT
in Amsterdam, while Unibail shares fell 3.4 percent to 227.49
euros. According to the terms of the deal, that valued Rodamco
at 120.57 euros per share, or 10.8 billion euros.
"It is difficult to call the deal cheap but you can see the
long-term rationale," said Deutsche Bank analyst John Perry in
London, citing a near-doubling in Unibail's development
pipeline and the opportunity for it to expand out of France and
into market leading positions.
Together, the 2 firms were the biggest owners of retail
properties in Sweden, Spain, and the Netherlands, as well as in
In a webcast, Unibail Chief Executive Guillaume Poitrinal
said the combined company will target a maximum 50 percent
weighting in any one country and will be three-quarters
invested in retail property. He said the plan was to pare back
an initial 60 percent weighting in France by divesting office
In March, Unibail and Goldman Sachs's Whitehall Fund sold
the Coeur Defence office complex in Paris for a European record
2.1 billion euros.
Dutch broker Kempen said in a note that based on its
estimates for 2008 and beyond, the Unibail-Rodamco share
exchange would be dilutive on a net asset value basis.
"Although the transaction would provide longer-term growth
potential for Unibail, we lower our rating on Unibail from Add
to Neutral," Kempen said.
"MERGER OF EQUALS"
The two companies billed the offer as a "merger of equals."
Unibail's Poitrinal, who will lead the merged company, told
a conference call there was a "perfect fit" with Rodamco as
both companies had targeted the same quality of assets in the
past 15 to 20 years.
While Rodamco Europe focused on retail properties and was
diversified geographically, Unibail focused on France and was
spread out across different sectors.
Rodamco Europe Chief Executive Maarten Hulshoff will leave
the firm when the deal is completed with a severance package of
3 years salary plus pension benefits.
The companies said the merger would create significant
synergies that should increase net rental income by 40 million
euros to 65 million euros annually by 2012.
PGGM, Rodamco's largest shareholder with about 25 percent
of the outstanding shares, has expressed its support, the
The supervisory and management boards of Rodamco supported
the offer, with the exception of Terry Dornbush, who resigned
from the supervisory board, Rodamco said.
According to the agreement, the merged company's registered
office will be in Paris while its international headquarters
will be in the Netherlands, where Poitrinal will be based. It
will have its primary listing in Paris and a secondary listing
Other Dutch property stocks, such as Wereldhave (WEHA.AS)
and Corio COR.AS, rose in the wake of the deal.
Shares in Britain's Hammerson (HMSO.L), which hit an
all-time high last month on takeover speculation with Unibail
touted by traders as one of various potential bidders, were up
0.12 percent at 1,709 pence.
"The rumors have not been completely put to bed by today's
news," Perry said.
(Additional reporting by William Kemble-Diaz in London and
Harro ten Wolde in Amsterdam)