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Contemplated merger with Beni Stabili:
A major step forward inEuropean strategy & Group simplification
-
April 20th, 2018
CONTENTS
FONCIÈRE DES RÉGIONS
> Beni Stabili: the leading Office player in Milan
> Strategic merger supported by strong Milan office market dynamic
> Simplification as a growth driver
> Contemplated transaction & estimated impacts
> An attractive value proposition for Beni Stabili shareholders
> Key takeaways
2
Beni Stabili: the leading Office player in Milan
3
FONCIÈRE DES RÉGIONS
BENI STABILI: THE LEADING ITALIAN OFFICE PLAYER
€3.5 bn portfolio1 Group Share
(€4.2 bn on a 100% basis)
Offices -excl.
Telecom Italia69%
Offices -Telecom Italia
23%
Non strategic8%
>Strategic focus on offices
With an unparalleled portfolio in MilanFuelled by a c. €800 M pipeline
mostly in Milan (89%)
CBD
Centre
Semi-centre
Periphery
Porta Nuova
M4
M4
M2
M2
M1
M1
M1
M5
M3
M3
Linate Airport
M5
Milanofiori
Navigli
Lorenteggio
City Life
Certosa Maciachini
Bicocca
Sesto San Giovanni
Cernusco / Vimodrone
SegrateLambrate /
Forlanini
San Donato Milanese
Ripamonti
Existing Portfolio Development Pipeline Business Districts
64% of total GAV in Milan€2.2 bn (Group Share)
Committed projects
-
€317 M
Managed projects
-
c. €460 M
Offices: 92%1 As of year end 2017, pro-forma the 9% disposal in SICAF Telecom Italia2 100% basis
253 assets(1,903,000 m²)2
51 assets(620,000 m²)2
8 projects(198,100 m²)
61% CBD &
Porta Nuova
22% Center &
Semi-Center
17% Periphery
4
FONCIÈRE DES RÉGIONS
Focus on Milan1
% Telecom Italia1
642%
49%
41%
232%
Investment Grade Rating
2017
Loan-to-ValueOccupancy rate(Offices, excl. TI)
1 Based on Gross Asset Value2 Proforma of the additional disposal of 9% of SICAF Telecom Italia
+15pp
(18pp)
MAJOR STRATEGIC SUCCESSES SINCE 2015, BRINGING TO THE MERGERDELIVERING ON TARGETS ANNOUNCED IN 2015PAVING THE WAY TO A STRATEGIC GROUP INTEGRATION
2015 2017
95.1%
87.5%
+760 bps
2015 2017
44.1%
50.9%
2015 2017
Healthier credit profileImproved OccupancyDiversified Tenant Base
&Focus on Milan
Increased Debt Maturity
~6 yrs
(vs. 4.3 yrs in 2015)
ReducedCost of Debt
2.15%
(-76 bps vs. 2015)
Milan Office(excl. TI)
83%
5
Strategic merger supported by strong Milan office market
dynamic
6
FONCIÈRE DES RÉGIONS
MILAN OFFICE MARKET DYNAMIC SUPPORTING THE PROPOSED TRANSACTIONREGAINED MOMENTUM OF MILAN OFFICE MARKET, FAVOURING GRADE A ASSETS
Source: Cushman & Wakefield
CBD / Porta Nuova Centre Semi Centre Periphery
2.3%
Hinterland
Vacancy Milan: 10.3%6.8%
-Grade A as % of
total take-up2017
70%-
2017 take-upvs. 2015
~+20%
€400
€420
€440
€460
€480
2013 2014 2015 2016 2017-2018
+10%
1.7% 1.8% 2.9% 2.4%
4.5% 4.3%2.4%
12.5% 11.0%6.0%
15.4%
4.2%
13.5%
2.%Of which Grade A
Beni Stabili Milan vacancy: 2.4%
Increased Take-up:
Preference for Grade A
Limited Vacancy for
Grade A Properties:
MilanVacancy Rate (Q1 2018)
Increasing Rents for
Quality Assets:
Average Economic Rent for Prime Offices
7
Simplification as a growth driver
FONCIÈRE DES RÉGIONS
Foncière des Régions
SIMPLIFICATION AS A GROWTH DRIVER
A key milestone towards the ongoing objective of simplification
Improve flexibility and reactivity
Intensify client centric approach
Capitalize on a €21 bn Group: financing sources / cost, synergies and sharing of best practices between products & countries
1 As of mid-2018, including secured transactions in H1 2018
€2.0 bnGroup Share
€3.1 bnGroup Share
GermanResidential
Immeo
HotelsEurope
FDM
Ownership: 42.0%(limited partner)
€8.6 bnGroup Share
Offices
Group structure - Post contemplated merger
GAV
~ €15 bn1
Group Share
Beni Stabili
52.4%
FDM
50.0%
FDL
61.3%
ResidentialFrance
FDM Management
40.7%
Hotels
Immeo
61.0%
ResidentialGermany
Offices Italy
SICAF Telecom
Italia
51%
Group structure - 2017
DelistingCompleted
in 2017
MergerCompletedEarly 2018
Merger: Proposed
TransactionOwnership: 61.7%
9
FONCIÈRE DES RÉGIONS
A TRANSACTION STRENGTHENING THE GROUP’S STRATEGIC PILLARS
+€1.7 bn of assets1 mainly in Milan
Foncière des Régions portfolio to reach
c. €15 bn2 Group Share (€21 bn at 100%)
Know-how sharing &
leveraging synergies between
markets and countries:
Full integration of ~ €800 M
Beni Stabili’s pipeline in Milan
Full integration to best serve our clients
Strengthenedproperty developer
Focus on European capital cities
1 32
> Coworking: Milan #1 Wellio site by 2019
> Hotels: Italy as a targeted market +€275 M of new committed projects in Milan
2018 and 2019
1 Group Share2 As of mid-2018, including secured transactions in H1 2018 10
FONCIÈRE DES RÉGIONS
2018-2019:Selected future committed projects
Milan, Symbiosisc. 15,000 m²
Milan, The Sign B / Cc.17,000 m², ~ €70 M
#2 projects61,294 m²
€143 M
#6 projects92,100 m²
Milan, Via Dantec. 4,700 m²
Milan, Corso Italiac.11,000 m²
End- 2014 End-2015 End-2016 End-2017 2018-2019
#6 projects89,400 m²
€325 M€317 M
>5 projects>110,300 m²
€400 M
+26%, in value
-
FOCUS ON DEVELOPMENT PIPELINE IN MILANCOMMITTED PIPELINE EVOLUTION: +26% INCREASE BY 2018-2019
Deliveries€190 M
New Commitments
€275 M
Headquarters 19,000 m², Symbiosis, Milan
Headquarters 8,300 m², Via Cernaia, Milan
Headquarters 9,500 m² (Q1 2018), The Sign, Milan
Main lettings
100
% M
ila
n
A major partner of the development and regeneration of new tertiary areas in Milan
Launched in Q1 2018
11
Contemplated transaction & estimated impacts
FONCIÈRE DES RÉGIONS
Unanimous support from Foncière des Régions Board of Directors
Transaction conditional on Foncière des Régions and Beni Stabili 2/3 approval at respective
Extraordinary General Meeting1
Foncière des Régions proposed exchange ratio: 8.5 FDR shares for 1,000 Beni Stabili shares (post
2017 dividend distribution)
FDR intends to acquire additional BS shares in the market, to reach up to 60% in Beni Stabili capital
Foncière des Régions planning a dual listing in Paris and Milan
FDR52.4%
Crédit Agricole Assurances
5.7%
Delfin3.4%
Free float38.5%
> Beni Stabili Shareholding Structure
Accretive Financial Impacts and Further Enhanced Capital Markets Profile
Slightly Accretive
> Preliminary identified synergies: ~ €5 M
> EPRA Earnings per share: ~+1%
> NAV per share: ~+1%
Maintained
Healthy Financial Profile
Dual Listing Paris / Milan
Shareholders Support
Merger Terms
Strengthened
Capital Markets Profile
+ ~€700 M Market Cap2
CONTEMPLATED TRANSACTION & ESTIMATED IMPACTS
1 In case the Merger is accepted by the EGMs of both companies, Beni Stabili shareholders who did not contribute to the resolution are entitled to a cash withdrawal right in accordance with applicable law2 Assuming (i) the acquisition of additional Beni Stabili shares in the market by FDR, to reach 60% in Beni Stabili prior to completion of the merger and (ii) 100% straight merger
Note: Share prices as of 19 April 2018 (FDR: €88.30, BS: €0.730)
13
FONCIÈRE DES RÉGIONS
Proforma shareholding structure1
Delfin 26.6%
Covéa 7.1%
Crédit Agricole Assurances 8.1%
ACM 7.6%
Free Float 50.6%
Note: Share prices as of 19 April 2018 (FDR: €88.30, BS: €0.730)1 Assuming (i) the acquisition of additional Beni Stabili shares in the market by FDR, to reach 60% in Beni Stabili prior to completion of the merger and (ii) 100% straight merger
AN ENHANCED CAPITAL MARKET VISIBILITY: INCREASED SCALE AND ENLARGED FREE FLOAT
€7.3 bn
€6.6 bn
Increased market capitalization
Post merger1
April 2018
An enlarged free float, increasing liquidity
+ € 0.7 bn
€5.7 bnEnd 2016
€3.7 bn(50.6%)
€3.2 bn(47.8%)
Post merger1
April 2018
+ €0.5 bn(+ ~17%)
€2.5 bn(43.8%)End 2016
14
FONCIÈRE DES RÉGIONS
AN ENHANCED EUROPEAN PORTFOLIO, FOCUSING ON CAPITAL CITIES
1 End 2017, pro-forma of 9% SICAF Telecom Italia disposal2 As of mid-2018, including secured transactions in H1 2018
Milan64%
Turin7%
Rome5%
Northern Italy15%
Others9%
~€15 bn€3.5 bn1 €12.8 bnGAVGroup Share
Direct impact of the contemplated Transaction-
+€1.7 bn, mainly in Milan(Group Share)
France45%
Italy 22%
Germany26%
Rest of Europe7%
France53%
Italy14%
Germany28%
Rest of Europe5%
100% Italy
Foncière des Régions post-merger2
Foncière des Régions
Dec-2017
Beni Stabili
Dec-2017
15
An attractive value proposition for Beni Stabili
shareholders
FONCIÈRE DES RÉGIONS
Access to
#4 European REIT2
Strengthened Capital Market
Profile
Enhanced Return Profile
Stronger Credit Profile
AN ATTRACTIVE VALUE PROPOSITION FOR BENI STABILI SHAREHOLDERS
Improved credit rating
combined with a
lower cost of debt
Increased and enhanced stock market profile / size
Increased free float & liquidity for shareholders (~x63)
€1.7 bn
Beni Stabili3Market cap.
Free Float: €0.6 bn(38.5%)
1 As of 19 April 2018. FDR 3-month VWAP: €88.19, BS 3-month VWAP: €0.693. Calculation ex-dividend (FDR dividend: €4.50, Beni Stabili dividend: €0.033). 2 On a 100% basis3 Based on 19 April 2018 share prices (FDR: €88.30, BS: €0.730) and assuming (i) the acquisition of additional Beni Stabili shares in the market by FDR, to reach 60% in Beni Stabili prior to completion of the merger and (ii) 100% straight merger4 Based on an exchange parity of 8.5x FDR shares for 1,000 BS shares. Based on a 2017 dividend of €4.50 for FDR shareholders and €0.033 for Beni Stabili shareholders
€7.3 bn
Combined3
Free Float €3.7 bn(50.6%)+16% dividend per
share increase for Beni Stabili shareholders4
… offering a unique exposure to Europe and to its most growing markets
office, hotel and residential markets
Paris, Berlin, Milan
Sizeable development pipeline valued in excess of €5 bn
Premium to share price exchange ratio
+ ~8%
As of 19 April 2018, at the proposed
exchange ratio
Based on 3 month VWAP basis1
17
Key takeaways
18
FONCIÈRE DES RÉGIONS
KEY TAKEAWAYS
> Successful completion of Beni Stabili transformation initiated in 2015
> Enhanced focus on European capital cities
> Stronger development pipeline
> A further simplified and integrated Company acting as One Team
> Accretive financial impacts & further enhanced Capital Market profile
Market cap +€0.7 bn / Free-Float +17% in value
> Attractive transaction terms proposed to Beni Stabili Shareholders
+ ~8% Premium to the 3-month VWAP exchange ratio1 / +16% dividend per share increase2
> Group rebranding to be announced soon
1 As of 19 April 2018. At the proposed exchange ratio FDR 3-month VWAP: €88.19, BS 3-month VWAP: 0.693€. Calculation ex-dividend (FDR dividend: €4.50, Beni Stabili dividend: €0.033). 2 Based on an exchange parity of 8.5x FDR shares for 1,000 BS shares. Based on a 2017 dividend of €4.50 for FDR shareholders and €0.033 for Beni Stabili shareholders
19
FONCIÈRE DES RÉGIONS
INDICATIVE TIMETABLE
Board Meeting of Foncière des Régions formally initiating discussions on Merger Agreement
Board Meeting of Beni Stabili formally initiating discussions on Merger Agreement
Signing of the Merger Agreement
Foncière des Régions / Beni Stabili Extraordinary General Meetings
Capital Markets Day in Milan
Regulatory approvals and other customary closing conditions
Expected Closing
19 April 2018
20 April 2018
By End May 2018
September 2018
18 October 2018
H2 2018
End-2018
20
FONCIÈRE DES RÉGIONS
Paris30, avenue Kléber75116 ParisTel.: +33 1 58 97 50 00
ContactPaul ArkwrightTel.: +33 1 58 97 51 85Mobile: +33 6 77 33 93 58paul.arkwright@fdr.fr
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