Atrium board stands by Gazit take-private offer following go-shop process

Following an unsuccessful process to find a superior offer, Atrium's independent committee of the board of directors said it continues to recommend a €3.75 per share cash bid received by Tel Aviv-listed Gazit Globe.

In a statement on Wednesday, Atrium said it had contacted 35 potential investors over the past seven weeks in an effort to solicit a higher offer but the process ended unsuccessfully with no bids.

As such, the company's independent committee continues to recommend the Gazit offer which represents a premium of 18.3% to Atrium's closing share price on the day prior to Gazit's offer. 

The announcement follows publicly voiced concerns by French fund management company Icamap which earlier this month dismissed Gazit Globe's takeover offer for Atrium's outstanding shares as 'unfair and unacceptable', advising the board of Atrium to 'withdraw or renegotiate its recommendation' for Gazit's proposal.

In a letter signed by managing director Harm Meijer, Icamap - which is a minority shareholder of Atrium, with a 1.38% stake in the company - told the Atrium board that the offer 'significantly undervalues' the company.

'Based on multiple valuation criteria, Icamap estimates a fair value range between €4.75 and €5.25 per share versus €3.75 per share offered, which even excludes the two expected quarterly dividends for the remainder of the year,' Meijer wrote.

'The market recognises that Gazit is acquiring Atrium at a bargain,' the letter said, adding that the 'seven week "go shop" window put in place to solicit alternative offers from third parties is clearly and completely inadequate'.

Icamap was founded in 2014 by former Unibail-Rodamco CEO Guillaume Poitrinal.

Gazit's offer

Tel Aviv-listed Gazit Globe, the majority shareholder in shopping centre owner and developer Atrium European Real Estate for the past 11 years, announced plans last month to take full control of the listed, CEE-focused company and make it private. Gazit chairman Chaim Katzman told PropertyEU that the move underlined its faith in Atrium’s retail strategy in Warsaw and Prague, while also taking advantage of a year-long decline in the European firm’s share price. Gazit owned 60.1% of Atrium, which is listed on the Vienna and Amsterdam Euronext stock exchanges.

‘There is no doubt that there is a negative sentiment towards retail stocks in Europe right now,’ said Katzman. ‘But we believe that Atrium’s assets are resilient and have potential for future growth – even if we are alone in that thinking. We hope we’re not wrong.’

CEE-focused portfolio
Atrium owns 34 shopping centres in Central and Eastern Europe (CEE) with a value of around €3 bn, 85% of which derives from assets in Poland and Czech Republic, with the rest in Slovakia and Russia. However, investor fears about the impact of e-commerce and global headwinds affecting the retail trade have seen Atrium’s share price slide by 16% over the last year.

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