A consortium formed of Hines and Grupo Lar has announced a voluntary cash tender offer to buy Lar España Real Estate – the Spanish shopping centre and retail park owner.
The consideration offered to Lar España’s shareholders consists of €8.10 per share, paid in cash, which implies valuing Lar España’s share capital at €678m. The offer price implies a premium of 16% over the closing share price, but a 20% discount to the company’s NAV.
The consortium is owned 62.5% by the closed-ended real estate fund Hines European Real Estate Partners III (HEREP III) and 37.5% by Grupo Lar Retail Investments (Lar España’s asset manager, which holds a 10% shareholding in the company).
The consortium plans to fund the offer with a combination of equity and external debt financing. The intention of the parties is to increase leverage in the company to c.60% LTV.
The consortium said that it was convinced that Lar España stock is now perceived as less appealing to public equity investors as compared to when Lar España completed its IPO in 2014 and the following years for various reasons, including:
- Small/mid-cap nature within the broader real estate listed context, despite being the largest retail park and shopping centre operator in Spain;
- Limited liquidity of the stock.
The offer is conditional on a minimum level of acceptance by shareholders, no new asset acquisitions or disposals and no material changes in the net debt/cash position.