US asset management giant Blackstone has announced plans to launch a €1.1 bn takeover offer for Reale Compagnia Italiana, a Milan-focused office property landlord.
Blackstone has reached an agreement with shareholders representing roughly 70% of the capital of the firm to buy shares at a price of €152,000 apiece. Following the acquisition, which is conditional upon securing at least 50% of the company's capital and is expected to close by November 2, Blackstone will launch a takeover offer at the same conditions for the remaining 30% interest in Reale Compagnia Italiana, representing an investment of €341 mln.
The price paid reflects a total value for the entire share capital of the company of €1.15 bn.
Founded in 1911, Reale Compagnia Italiana is owned by 331 shareholders, and owns 14 office and retail assets at inner city locations in Milan, such as piazza Repubblica and via Turati, via Verdi, via Vincenzo Monti as well as the famous via Montenapoleone. The portfolio also includes one asset outside the city, the Galleria Subalpina in Turin (pictured).
In a statement, Reale Compagnia said that 'the bidder is an ideal partner to foster growth and the future development of the company by virtue of the substantial financial resources at its disposal and the experience gained in the Italian real estate market'. It added: 'Blackstone believes that the value of the portfolio can be increased in the medium-long term through strategic asset management initiatives, such as the renegotiation of strategic lease agreements, the improvement of the tenant mix, the leasing of free spaces and the undertaking of further capital investments, which consider can be made with greater effectiveness having a smaller shareholder base and therefore more flexibility from an operational point of view, with the support of a sponsor, such as the offeror, with significant financial means and experience'.
Blackstone plans to carry out the asset management and operational initiatives on the portfolio through its 35% owned arm, Italian asset management firm Kryalos.
Reale Compagnia Italiana is being advised by Goldman Sachs and Colliers while Mediobanca is acting for Blackstone.
Blackstone is making the investment through Rialto Holdco sarl, a Luxembourg-based new company indirectly owned by Blackstone Property Partners Europe Lower Fund 2 (BPPE LF), managed by Blackstone Property Associates Europe (Lux) sarl.