Klépierre and Plaza Centers, a wholly owned subsidiary of Elbit Medical Imaging Ltd., today announce that their respective Supervisory Board and Board of Directors have approved a binding Heads of Terms signed on May 10, 2004 for the acquisition in Hungary of 12 shopping centers and a 50% equity interest in the company that currently manages the acquired centers, for a total of approximately € 285 million.
The transaction is expected to close before the end of July 2004, after all customary due diligence audits have been performed, and pending the approvals of the financing banks and the regulatory authorities, if required.
The aforementioned shopping centers were developed or acquired by Plaza Centers between 1995 and 2003. Located in center city retail hubs of major Hungarian cities, these shopping malls cover a total gross leasable area of approximately 168,000 square meters and generate annual triple net lease income of approximately € 26 millions.
Commenting on the announcement, Eric Ranjard, Vice Chairman of Klépierre Executive Board noted: 'This is one of those rare opportunities in Europe to acquire, in a single transaction, both a significant position in a new market and high-quality, centrally located malls. The transaction meets all of our usual development criteria: a portfolio that will immediately give Klépierre critical mass in Hungary, well-designed shopping malls that show real potential for enhancement, and control over management via experienced teams of professionals. The entrance of Hungary in the European Union and its planned membership in EMU clearly position this country within our development region of predilection. The fact that we share the same values
with Plaza centers in terms of shopping center development and management quality has greatly facilitated the establishment of our joint commercial relations.'
Mr. Mordechay Zisser, Chairman of the Board of Directors of Elbit Medical Imaging Ltd. (the parent company of Plaza Centers) commented: 'The Boards of Directors of Elbit Medical Imaging Ltd. and Plaza Centers have approved this transaction, in preference over other bids, for many reasons, not the least of which is that the Klépierre group is a leading force in the market with a long term commitment to ownership, considerable expertise and experience in shopping mall management, and excellent relations with major European retail brands. We are confident that this transaction signifies the start of a highly productive co-operation between our two groups in the region.