PROFILE: Who is Icamap?

Private equity real estate firm Icamap has played a leading role in two recent corporate takeovers, but what kind of firm is it?

In the first part of the 2000s, Harm Meijer’s name would regularly crop up in European property. He penned any number of analyst notes on a group of around 44 publicly listed European property companies. As one of a four-strong team within pan-European real estate research at JP Morgan Cazenove, his missives were widely anticipated and well regarded. He won acclaim and was ranked ‘best sell-side research analyst’ five times by Extel and six times by Institutional Investor.

A decade later, the Erasmus University, Rotterdam graduate is in his mid-40s and his name is still cropping up but in a different context – no longer as an analyst but as a founding partner of private equity real estate firm, Icamap.

Two recent situations where his name has arisen concern Atrium European Real Estate, the CEE owner and operator of supermarket-anchored shopping centres that has just been forced to reject a takeover approach, and easyHotel, the group behind 39 franchised and owned hotels in Europe.

Icamap is involved in both companies: it is a minority shareholder with a 1.38% stake in Atrium, the subject of a recent takeover bid by Tel-Aviv-based Gazit Globe. Thanks partly to Meijer’s vociferous opposition to the move, Gazit Globe was forced to abandon its bid.

Meanwhile, Icamap and Canadian partner Ivanhoe Cambridge are taking easyHotel private.

Icamap’s modus operandi
Though the firm is clearly not at the level of giants such as Blackstone, it is becoming better and better known.

Legally based and regulated in Luxembourg, the company has offices in London and Paris. It was founded in 2013 by Meijer alongside the firm’s chairman Guillaume Poitrinal, who is a former CEO of Unibail-Rodamco, and Alexandre Aquien, a former oil, gas, utilities and infrastructure investor at a hedge fund and before that private equity and infrastructure professional at Goldman Sachs.

According to its website, Icamap’s modus operandi is to make value added investments by creating and managing specialised real estate investment platforms on behalf of underlying institutional investors. To do that, it tapped the market six years ago to raise equity. It managed to secure an impressive €750 mln for its debut fund, Icamap Investors I. It subsequently raised €750 mln for a fund to develop new-generation, low-carbon offices in Greater Paris. This venture is called Icawood and has 12 investors.

Icamap might appear to the outside world as an aggressive shareholder activist. Yet Meijer tells PropertyEU it is in fact a ‘supportive investor’ that happens to believe in standing up and being heard in situations that are not correct.

‘Icamap aims to be an active long-term supportive shareholder, working closely with management, shareholders and other stakeholders. All capital investments are aimed at unlocking and accelerating growth in the companies we choose to support,’ he says.

EasyHotel & Atrium
The two high-profile engagements with easyHotel and Atrium are very different situations, he explains. EasyHotel is listed on London’s junior Alternative Investment Market (AIM) and as a small cap business was hardly noticeable. When the company required a fresh injection of capital, there was no-one else to provide it, except Icamap. It twice stepped in and Meijer took a seat on the board. He says this was to lend it support not just in terms of capital but also knowledge.

He points out that being on the board of easyHotel has been time-consuming. It also comes with the cost of not being able to trade in its shares when privy to confidential information.

At some point, Meijer and his colleagues decided the company’s best interests lay in it being privately backed. And so, the private equity real estate company made its move, mounting a cash offer to delist it. Just last month, it updated the market that it and Canadian partner Ivanhoe Cambridge own 68.8% following a recommended mandatory cash offer.

However, the takeover has not been without public resistance. It was opposed in public by none other than easyHotel’s founder Stelios Haji-Ioannou, who urged shareholders not to do anything to allow the takeover. Some 27.9% of easyHotel's share capital is still held by easyGroup, the private investment vehicle of Haji-Ioannou and owner of the ‘easy’ family of brands, leaving a balance of 3.4% minority shareholders.

But it seems that Icamap and Ivanhoé Cambridge, which is a real estate subsidiary of Caisse de dépôt et placement du Québec, have got their way. They said in their statement they had ‘finalised’ the takeover of the group that started in 2004.

Demonstrating its progression in share ownership, the two private investors said that as at 2 August 2019, the Icamap Fund was the largest shareholder in easyHotel with 38.7%, through two equity placings in 2016 and 2018, in which it provided most of the capital easyHotel was seeking to raise at the time.

For some time, Icamap believed that finding another equally supportive investor to share its commitment to developing easyHotel was a priority for the company. Icamap therefore partnered Ivanhoé Cambridge, an existing investor in the ICAMAP Fund, to achieve its ambitions. Ivanhoé Cambridge, like Icamap, said it ‘recognises that easyHotel needs significant investment to ensure it can fulfil its potential as a leading European budget hotel company’.

On 5 August 2019, Ivanhoé Cambridge and the Icamap Fund launched a recommended offer on the share capital the fund did not already own. On 1 October 2019, Citrus UK Bidco Limited, the newly incorporated bid company received acceptances for the offer which, together with the shares acquired during the offer, resulted in Ivanhoé Cambridge and the Icamap Fund together owning 68.8% of easyHotel’s share capital.

The offer enabled shareholders to exit from an illiquid stock at a 34.8% premium and resulted in ‘greater clarity’ of ownership and direction for the company and its management team.

Each consortium member will appoint one board member in addition to Meijer who has been on the board since March 2018.
Commenting on the closure of the offer, Karim Habra, head of Europe for Ivanhoé Cambridge, said: ‘This investment perfectly illustrates our innovative value-creation strategies through a complex operation. The easyHotel concept is pioneering and visionary. It is already a strong brand and we believe in its growth potential on a pan-European scale at a time when mass tourism is growing rapidly every year.’ ’

Atrium take-private
So easyHotel is set to go private at Icamap’s behest. But Atrium is a very different story. In this case, it has opposed a take-private operation.
Icamap says it has been ‘supportive’ of this retail property company, and that it liked its previous and current management, but believes there is more value to be gained in the company than a ‘low ball’ offer placed on the table by 60% shareholder, Tel Aviv-based Gazit Globe.

In a letter last month to the board, minority shareholder Icamap said it would vote against the takeover and urged others to do likewise. In fact, 92% of investors are in favour of the takeover according to a survey, but Meijer complained that poll excluded the opinion of vocal shareholders and restated his conviction the offer on the table is unfair and unacceptable in that it significantly undervalues the company.

Icamap already voiced written objections to the offer in early September. Since then, Meijer argues, the EPRA Developed Europe index has gone up by 5.2%. Taking into account this bounce and the loss of two quarterly dividends, the bid premium is not 18% but only a meagre 8.4%. 'The Independent Committee apparently believes that selling at a large discount of 25.7% (or 28.4% including the impact of two missed dividends) to the H1 2019 reported EPRA Net Asset Value (NAV) per share of €5.05, which is based on external independent real estate appraisers, is a good deal for minority shareholders and that the process was fair. ‘We struggle to understand their reasoning and believe they are not acting in line with their fiduciary duty,’ he wrote in the letter.

He continued: ‘We strongly hope that this announced transaction does not set a precedent in listed real estate. We reiterate that the current proposal is unfair and Icamap again advises the board of Atrium to withdraw or renegotiate its recommendation for the proposal of Gazit.'

In a twist last month, it appears that shareholders have listened to Meijer – the takeover is off. In a vote held on a Friday late last month, shareholders voted 63.6% against the offer, with 36.4% in favour, from a total of 59,444,486 shares. Meijer says, ‘We are very happy about the result. We are reasonable, supportive people and not aggressive activists, but this offer was not good for shareholders, so we had to say something.

‘Now let’s see what happens next, but if nothing else we would like to have dividends reinstated because they didn’t pay a dividend in September and there is supposed to be a special dividend before year-end, as well as the December dividend.

‘Atrium is a nice company and they should look at other ways to create value, for example by selling assets. A lot of time and energy has been wasted on this and to be honest it is a lesson in buying a company on the cheap; that it can really backfire.’

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