Rodamco and Unibail to create leading pan-European commercial property company (NL/FR)

Rodamco Europe N.V. and Unibail Holding S.A., have announced that they intend to combine both companies to create the leading pan-European commercial property company.

The combination will be a merger of equals which will offer investors a unique investment platform with the following characteristics:

  • The leading pan-European commercial property company with a combined pro-forma 2006 portfolio appraised at €21.7 billion and a pro-forma 2006 net rental income of €974 million:
    - Combination of two companies with superior track records and best in class skills and
    - Creation of the largest pan-European portfolio of class-A shopping centers with over 700 million visits per year
    - Further opportunities for value creation through significant positions in the Paris Office and Convention & Exhibition markets
  • A compelling profile as an integrated Developer - Investor - Manager encompassing the whole value chain and benefiting from a combined development pipeline of over 1.5 million m² representing €6.1 billion in expected investment expenditure as at 31/12/2006 and a significant driver of future rental growth.
  • A clear strategic rationale leading to significant synergies that should increase NRI (net rental income) by €40 million to €65 million annually by 2012. The combination will also allow the group to take advantage of a pan-European platform to bolster its value -accretive development pipeline.
  • The Supervisory Board and Management Board of the combined group will reflect a balanced contribution from the two companies. The combined company's registered office will be in Paris and international headquarters operations will be based in the Netherlands.
  • Mr. Robert F.W. van Oordt, Rodamco's current Chairman of the Supervisory Board, will become Chairman of the Supervisory Board of the combined group. Mr. Guillaume Poitrinal, current Chairman and Chief Executive Officer of Unibail, will be Chairman of the Management Board and CEO of the combined group.
  • A Euro-denominated investment vehicle attractive to investors with a pro forma combined market capitalisation of €21 billion, listed on Euronext Paris (primary listing) and Euronext Amsterdam.
  • Rodamco's and Unibail's tax efficient Dutch FBI and French SIIC status are anticipated to be preserved.

The merger will be implemented through an exchange offer initiated by Unibail consisting of 0.530 of a Unibail common share for each Rodamco common share, with an alternative Offer open to Rodamco shareholders of 0.530 of a Unibail mandatory redeemable bond ("ORA") for each Rodamco common share up to a maximum of 20% of the Offer.

The terms of the Offer reflect broad neutrality in EPS and NNNAV for all shareholders. Both sets of investors will equally benefit from the expected synergies.

The envisaged transaction values each Rodamco share at €124.8 based on Unibail's closing share price of €235.5 as of 5 April 2007, representing:
  • a 15% premium based on Unibail's and Rodamco's closing share prices as of 5 April 2007
  • a 15% premium based on Unibail's and Rodamco's volume weighted average closing share prices over the month ending 5 April 2007

The Supervisory Board and Management Board of Rodamco, unanimously support the intended Share Offer, with the exception of Mr Terry Dornbush who has resigned from the Supervisory Board and abstained from voting. The two boards recommend that shareholders accept the intended Share Offer, when made.

The Board of Directors of Unibail has unanimously approved the Share Offer and the Alternative Offer and also unanimously recommends the transaction. PGGM, Rodamco's largest shareholder with approximately 25% of the outstanding shares, has expressed its strong support for the combination between Rodamco and Unibail given the sound industrial logic of this merger and its value enhancing prospects for shareholders.

Mr Maarten Hulshoff, CEO of Rodamco, said, "The combination of the development skills of Unibail and the Europea

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