February 12, 2018 / 5:00 PM / 10 months ago

Spanish property firm Haya lined up for May IPO by owner Cerberus -sources

MADRID, Feb 12 (Reuters) - Private equity firm Cerberus has hired advisers for an initial public offering of Haya in May, in a transaction which could value the real estate firm at up 1.1 billion euros ($1.35 billion), sources familiar with the matter said.

The planned flotation follows other Spanish real estate IPOs, such as last week’s listing of residential developer Metrovacesa, capitalising on a recovery in the country’s property market.

However, Haya’s listing would be first public offering centred on foreclosed assets in Spain.

Cerberus and other private equity firms bought toxic property assets from banks that weighed on lenders’ balance sheets after a real estate bubble burst a decade ago.

With around 40 billion euros in assets under management, Haya is third largest such company, behind Altamira - of which Apollo holds 85 percent and Banco Santander the rest - and Servihabitat - majority-owned by TPG, with 49 percent belonging to Caixabank

Rothschild will act as financial adviser to Cerberus on the Haya IPO, while JP Morgan and Citi would be global coordinators on the transaction, the sources said.

Cerberus, JP Morgan, Citi and Rothschild declined to comment on Monday.

The size of the IPO would depend on institutional investor appetite, one of the sources said.

With estimated core earnings of between 130 million euros and 140 million euros in 2017, the IPO is expected to value the entire company at around 1.1 billion euros, equivalent to seven times earnings before interest, tax, debt and amortisation (EBITDA), sources said.

Other real estate companies are considering flotations to capitalise on the market rebound.

Residential rental company Testa is working with banks on its own flotation in May, sources said this month, while residential developer Via Celere is considering listing on the exchange, according to media reports.

In November, Cerberus agreed to buy 80 percent of BBVA’s real estate business for 4 billion euros, showing how investor enthusiasm for Spanish property was reviving.

This was the largest deal since Santander sold control of property for a net value of 10 billion euros to U.S. investor Blackstone Group in August. ($1 = 0.8167 euros) (Reporting by Andrés González; writing by Jesús Aguado; editing by Sonya Dowsett and Alexander Smith)

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