Colonial board gives go-ahead to Dubai sovereign fund offer

19th March 2008, Comments 0 comments

The management board of Colonial yesterday gave its blessing to a buyout offer for the debt-laden Spanish property company tabled by the Investment Corporation of Dubai (ICD) sovereign fund.

19 March 2008

MADRID - The management board of Colonial yesterday gave its blessing to a buyout offer for the debt-laden Spanish property company tabled by the Investment Corporation of Dubai (ICD) sovereign fund.

In a statement to the National Securities Commission, the board gave a "favourable" opinion of ICD's offer, which if it proceeds would result in a full takeover bid of Colonial worth some EUR 1.9 billion. Core shareholders of the property company representing over 50 percent of its capital have accepted the sovereign fund's offer.

Colonial's share price closed yesterday up 9.8 percent at EUR 1.06. The company has lost some 48 percent of its market value since the start of this year as concerns mounted about its ability to service its some EUR 9 billion in debt in the credit crunch which has gripped international markets.

ICD's complex offer has a number of conditions attached to it. One of these is Colonial creditors such as Goldman Sachs and Royal Bank of Scotland agreeing to accept the deal and refinance a EUR 6.3-billion syndicated loan granted to the real-estate firm.

Prior to the takeover bid, Colonial shareholders are also being asked to back the spinning off of the company's land and property development division into a separate company.

[Copyright El Pais / ADRIAN SOTO 2008]

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