Market cool on Dubai fund's offer for Colonial

28th February 2008, Comments 0 comments

The sovereign wealth fund Investment Corporation of Dubai on Wednesday made a cash and securities offer for Colonial but conditioned its bid to its acceptance by the creditor banks of the debt-laden Spanish property company.

28 February 2008

MADRID - The sovereign wealth fund Investment Corporation of Dubai on Wednesday made a cash and securities offer for Colonial but conditioned its bid to its acceptance by the creditor banks of the debt-laden Spanish property company.

The cash component of the bid is at EUR 1.85 per share. A minimum of 50 percent of the payment for the deal would be made in debt instruments worth EUR 2.25 per share  when they mature in four and a half years.

Colonial's share price slumped 7.65 percent to EUR 1.57 as investors cast doubts on whether the deal would go ahead because of a string of provisos attached to it.

Colonial has assets of EUR 12 billion but is burdened with debts of some EUR 9 billion at a time when the Spanish property market is slowing and lending conditions have tightened considerably due to a credit crunch.

[Copyright EL PAÍS / A. SIM 2008]

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