Italian real estate asset manager Sorgente sait that it has won approval for a spin-off of some of its top income-generating assets into a real estate investment trust dubbed Sorgente RES.
Italian real estate asset manager Sorgente sait that it has won approval for a spin-off of some of its top income-generating assets into a real estate investment trust dubbed Sorgente RES.
The offer will see the issue of a total of 134 million shares at a price of €3 apiece, giving the company an initial market cap of €440 mln.
The shares, which will be listed on Milan's junior MTA Exchange, will include 13.5 million securities publicly offered and another 120.5 million to be offered privately to qualified institutions in Italy and abroad. A greenshoe option will allow the issuance of another 12.55 million shares in case of oversubscription,
Flatiron
The listing is believed to involve around €1.5 bn of assets including the group's 7.4% share in the Flatiron building in New York, as well as a number of trophy assets in Bari (Grand Hotel delle Nazioni), Milan (the head office of Banco Santander at via Senato) and Rome (the headquarters of Sorgente at Via Tritone).
Sorgente's partner Ipi will also transfer the renowned Lingotto building in Turin. Upon closing of the operation, Sorgente Group is expected to own less than 50% in the unit.
Banca Imi, Barclays Bank and BofA Merrill Lynch are acting as joint global coordinators and joint bookrunners for the listing. Intermonte will act as sponsor, joint bookrunner and advisor. Société Générale will act as co-lead manager.
Sorgente, an Italian fund manager with some €5 bn of assets, had long been planning the IPO for November last year but was forced to postpone the operation as a result of 'volatility in the financial markets'.
The Rome-based asset manager said at the time that the listing remained a 'strategic objective'. In May it announced it planned to revive the IPO.
Italian REIT changes
Changes to Italy’s REIT rules enforced at year end 2014 likely contributed in the group's decision to re-launch the listing this year. Key changes to the new SIIQ rules included lifting the ceiling for a majority shareholding in a SIIQ to 60% from 51%; lowering the dividend distribution requirement to 70% of recurring rental income from 85%; making the income from net capital gains subject to a 50% distribution obligation in the 24 months that follow the year that they are realised.
Italy, which introduced the REIT regime in 2007, has only seen the launch of two structures over the past years. Beni Stabili, the Italian arm of Foncière des Régions, is currently the largest SIIQ in the market, followed by IGD, a Bologna-based retail specialist.
Sorgente is one of three players which recently announced plans to list shares or convert to REIT status.
Asset manager Idea Real Estate said last week that it has applied for a listing of its shares on Milan's MTA junior stock exchange in a move which would help fund a major acquisition signed last month.
Idea Real Estate is believed to be looking to raise €500 mln from the Initial Public Offering, according to local newspaper Milano Finanza.
The news comes just a few days after another Italian firm, Coima sgr (previously Hines Italia sgr) announced it had won backing from the Qatar Investment Authority (QIA) to spin off its income-generating assets and convert the unit to real estate investment trust status (REIT or SIIQ in Italian).