Secure Property Development and Investment sells non-Greek assets – Secure Property Development & Investment has entered into an agreement for the sale of its property portfolio, excluding its Greek logistics properties, in an all-share transaction to Arcona Property Fund N.V.. The deal values SPDI’s non-Greek portfolio at EUR29.25 million (based on a net asset value of EUR13.98 per Arcona share), a 95% premium to the entire market capitalisation of the company!
Arcona is an Amsterdam-listed company that invests in commercial property in Central Europe. The transaction is subject to, among other things, asset and tax due diligence (including third party asset valuations) and regulatory approvals (including the approval of a prospectus required in connection with the issuance and admission to listing of the new Arcona shares) as well as successful negotiating and signature of transaction documents. If successful, SPDI and Arcona expect to close the transaction during Q1 2019.
Arcona’s purchase of the portfolio is to be settled through the issuance of 2,102,804 new shares in Arcona and the transfer of existing senior debt over the related properties totalling c.EUR30 million. The new shares will be listed both in Euronext Amsterdam and the Prague Stock Exchange and are expected to be distributed to existing shareholders of SPDI pro-rata to their shareholding in SPDI shares. As a result, the total number of Arcona shares in issue will increase to 5,267,953. The Arcona share price has been between EUR7 and EUR7.2 over the last 30 days.
Additionally, an earn-out component has been proposed as part of the transaction and would result in warrants over a further circa 506,830 Arcona shares being issued to SPDI shareholders. These warrants would be exercisable at no cost if the Arcona share price reaches EUR8.60 within five years of completion of the transaction.
Arcona is a company listed on the Euronext Amsterdam and the Prague Stock Exchange (Burza cenných papír Praha) (ISIN-code NL0006311706) that invests in commercial property in Central Europe and is focused on high-yielding regional office and retail investments, and its diversified portfolio currently includes 14 assets in the Czech Republic and Slovakia and 12 in Poland with a total value of approximately EUR94.8 million. Arcona intends to retain and enhance SPDI’s income-producing commercial properties in Romania which comprise approximately 45% of SPDI’s portfolio. These include the headquarters of Danone Romania and ANCOM, the Romanian Telecoms Authority. In parallel, SPDI’s ongoing disposal programme for its residential and land assets in Romania, Bulgaria and Ukraine will be continued. SPDI will retain the Victini (ex GED) Logistics centre in Athens, Greece, 100% let to Kuehne & Nagel, the German transportation and logistics company, and which during the last financial year generated annualised net operating income of c. EUR1.45 million.
The local teams of SPDI will be integrated into Arcona Capital Fund Management B.V. (Arcona Property Fund’s manager) and representatives of SPDI will be proposed for appointment to the Supervisory Board of Arcona for at least one third of its membership.
Lambros Anagnostopoulos, chief executive officer of SPDI, said: “By combining our complimentary asset portfolios in this all-share transaction, we are creating a significant European Property company which will benefit the shareholders of both listed entities. For our shareholders, we gain exposure to a Property Fund listed in Amsterdam which as a result of the deal will increase in size from EUR94.8 million to EUR161 million and its Net Asset Value from EUR41.9 million to EUR78 million, and which is generating substantial cash and issuing dividends to its shareholders. With this in mind we will be working hard with the Arcona team to finalise the deal with a view to completing the transaction in Q1 2019. I look forward to providing further updates as soon as practical.”
Michael Beys, chairman of SPDI, said: “This is a transformational and value-generating event for SPDI’s shareholders. In previous releases we have spoken of the huge disconnect that has opened up between the underlying value of our assets and our market valuation. The value of the Transaction, which covers just our non-Greek assets, demonstrates just by how much our EUR14 million market valuation has lagged the value of our portfolio. Even more so when the EUR4.9 million NAV assigned to our Victini (ex GED) Logistics centre, in Athens Greece, which is 100% let to Kuehne & Nagel, is added. By joining forces with a well-managed cash generating property company present in Central Eastern Europe, we take a major step closer to achieving the critical size necessary for the company to flourish, and providing our shareholders the opportunity to be part of such a growth and success story.”
SPDI : Secure Property Development and Investment sells non-Greek assets