* NSI says offer pre dividend is at 9.7 pct premium
* Companies facing tough domestic office market
* VastNed shares up 6.2 pct, Nieuwe Steen down 4.5 pct
(Adds VastNed, NSI, analyst comments, details, shares)
By Aaron Gray-Block
AMSTERDAM, Dec 13 Dutch real estate group Nieuwe
Steen Investments (NSI) (NSTEc.AS) unveiled details of an
all-share offer for VastNed Offices/Industrial VWNN.AS, a
surprise move to deepen exposure to its troubled home market.
The deal, which NSI said was at a 9.7 percent premium to
VastNed O/I's closing price on Friday, would mark a change in
strategy, NSI having looked to Switzerland, France and Germany
to expand abroad and build a portfolio of office and retail
properties since Israeli investment group Habas bought a 21
percent stake in 2007.
Petercam analyst Stephan Van Weeren said he believed NSI had
realised it was late into France, where office property yields
were falling below acceptable levels for NSI, while Switzerland
was expensive and it had struggled to get a sizeable portfolio
Both VastNed O/I, worth about 220 million euros at Friday's
closing price, and NSI are facing a tough domestic office market
hit by oversupply, slow economic growth, a problematic
demographic spread and a rising trend of flexible working.
NSI said the deal would create a company with 2.4 billion
euros in assets and a balanced portfolio of high-yielding
offices and retail space, while rental income would amount to
more than 200 million euros.
It added the combined group would rebalance towards a 50-50
mix between retail and office properties, and the deal would
provide annual synergies of at least 3.5 million euros.
"NSI looks forward to constructive and expeditious
discussions with VastNed O/I going forward," NSI said.
VastNed O/I did not respond to requests for comment, but
told news agency ANP it was surprised NSI had publicly detailed
the proposed offer prior to talks on Monday. A spokesman for
Habas was not immediately available.
Shares in VastNed O/I were up 6.2 percent at 12.28 euros at
1022 GMT, an almost eight-month high in a slightly positive
Amsterdam market, while NSI shares fell 4.5 percent.
Detailing its offer late on Sunday, NSI said it was
proposing an exchange ratio of 0.85 NSI share for every VastNed
O/I share, valuing VastNed shares at 12.72 euros, a 9.7 percent
premium to the closing price of 11.6 euros on Friday.
The final price would be 13.33 euros per share, including
VastNed O/I's direct investment result of 0.61 euros per share
for the nine months to Sept. 30, which it usually pays out as a
That would represent an exchange ratio 0.9, or a 15 percent
premium to VastNed O/I's Friday's close, NSI said.
ING analyst Pieter van der Meijden said the offer price
would be immediately accretive on a net asset value (NAV) basis
for NSI, but was at a discount to the NAV of 16.36 euros
reported by VastNed O/I on Sept. 30 at its nine-month results.
"I doubt VastNed Offices will accept the bid as it ...
implies quite a large discount to NAV," Van der Meiden said.
He added VastNed O/I shareholders would likely realise the
company was caught in a negative cycle and would not demand an
offer price at NAV, but NSI might still have to sweeten its bid.
NSI, which has a market capitalisation of 650 million euros,
said all assets and liabilities of VastNed would be transferred
to NSI, and VastNed shareholders would receive new NSI shares,
but it is still uncertain whether a deal will materialise.
(Editing by Hans Peters and Will Waterman)