December 19, 2012 / 6:51 PM / in 5 years

UPDATE 1-Spain's Metrovacesa to be delisted by bank shareholders

MADRID, Dec 19 (Reuters) - Real estate firm Metrovacesa on Wednesday said its majority shareholders had agreed to launch a tender offer to buy all outstanding shares and delist the company, in the latest blow for Spain’s deeply troubled property sector.

Spanish banks Santander, BBVA, Sabadell and Popular set the offer price at 2.28 euros per share, a 175 percent premium to the current price.

Another shareholder, Bankia, a Spanish bank that was nationalised in May and is not in a position to join the offer, has committed to hold onto its shares, while Banesto will sell them to its parent company Santander before the operation.

Altogether, the six banks currently own 95.6 percent of Metrovacesa, which they obtained four years ago in exchange for its massive debt. The delisting will cost them 99 billion euros ($131.3 billion).

Metrovacesa is one of the biggest real estate firms that expanded during Spain’s decade-long property boom and ran into trouble when the bubble burst five years ago.

Trading in Metrovacesa shares was suspended at 1610 GMT. Before the suspension, the shares were up 15 percent, at 0.83 euro, a shadow of the 54 euros they reached in 2006. The securities regulator CNMV said shares would begin trading again at 0730 GMT on Thursday.

Metrovacesa faces difficulty in selling its property assets to cut its 5.1 billion euros of debt because it will have to compete with a so-called bad bank that Spain set up this week.

The “bad bank” will receive about 80 billion euros in distressed real estate assets from Spanish banks to sell them off over the next few years at steep discounts.

Metrovacesa, which reported in June assets worth 7.32 billion euros, is the latest of a group of Spanish real estate firms and building companies that have disappeared or had to drastically adjust business to survive since the start of the crisis.

Competitors Reyal Urbis and Martinsa Fadesa are in bankruptcy proceedings, while Colonial has lost more than 99 percent of its value on the stock market and is racing to sell assets and cut its debt.

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