Fonciere des Regions and Beni Stabili, its 52.4% owned subsidiary and leading office REIT in Milan, have initiated discussions regarding a potential business combination. Fonciere des Regions has submitted a merger proposal to the Board of Directors of Beni Stabili, on the basis of an exchange ratio of 8.5 Fonciere des Regions shares per 1,000 Beni Stabili shares (ex-2017 dividend distribution).
Fonciere des Regions intends to pursue discussions with Beni Stabili in order to review the terms and conditions of a potential merger. The merger would be in line with Beni Stabili’s transformation plan initiated two years ago, and will further reinforce Fonciere des Regions investment strategy in Italy. It will also signify a new step towards Group simplification and would increase ties between its different divisions. Fonciere des Regions will enhance its position as a leading Pan-European integrated real estate player, by further strengthening its three strategic pillars: it will allow the company to better focus on large European capital cities, capitalise on the success of its development projects and on its €690m pipeline in Milan, and will help to integrate the teams and share know-how to best serve its clients.
Through the merger, Fonciere des Regions market capitalization would increase by c. €700m to reach over €7bn, while the company’s free float would increase by €500m to c. €4bn.
In case of a potential merger with Fonciere des Reegions, Beni Stabili shareholders would benefit from a diversified exposure to the main European real estate markets. In addition, the contemplated merger exchange ratio would translate into a c. +8% premium to the 3-month VWAP share price exchange ratio6 as of 19/04/2018.
In order to fully reflect its Pan-European footprint and be gathered under the same banner, Fonciere des Regions will adopt a new name before summer and will deploy a new brand in the various countries where it operates.