Colonial shares take off after fund offer agreed
Colonial's share price soared on Wednesday after the Investment Corporation of Dubai (IDB) sovereign fund reached an agreement to buy the rental business of the Spanish property company.13 March 2008
MADRID - Colonial's share price soared on Wednesday after the Investment Corporation of Dubai (IDB) sovereign fund reached an agreement to buy the rental business of the Spanish property company.
Colonial's share price closed up 15.31 percent at EUR 1.13 after an intraday high of EUR 1.17. Trading in Colonial's shares was suspended on Tuesday prior to the announcement of the IDB deal. In the previous session the stock lost over 15 percent.
The Dubai fund is offering to pay EUR 1.19 per share for Colonial's office and mall rental division, which has assets in Madrid, Barcelona and Paris worth some EUR 9.2 billion.
Shareholders representing over 50 percent of Colonial's capital have agreed to accept the offer. These include leading shareholder Luis Portillo and real estate firm Nozar, which, between them own over 50-percent of Colonial. Prominent businesswoman Alicia Koplowitz, who holds over 9 percent of Colonial, has also agreed to sell.
The accord obliges Colonial to table a full takeover bid for Colonial, offering the same terms to minority shareholders. Prior to that, Colonial has to agree to spin off its land and property-development business, which is valued at EUR 2.1 billion.
Colonial has lost almost half of its market value this year as a decade-long housing boom in Spain ended and a credit crunch gripped the financial markets.
[Copyright EL PAÍS / ADRIAN SOTO 2008]