Inmobiliaria Colonial files public tender offer for ordinary shares and convertible bonds of SFL

As announced in a press release issued on 9 June 2004, on 16 June 2004, Inmobiliaria Colonial filed a simplified public tender offer for the ordinary shares and the 4% convertible bonds due 31 October 2004 (the 'convertible bonds') of Société Foncière Lyonnaise ('SFL'), at a price of €38 per share and €153.52 per convertible bond (the 'Offer').

Background to the Offer
Following a competitive bidding process, on 9 June 2002 Inmobiliaria Colonial signed an agreement with the Aviva Group, the Exor Group, Geneval and Grosvenor Luxembourg (the 'Selling Shareholders') whereby Inmobiliaria Colonial purchased, at a price of €38 per share, the 19,978,192 SFL ordinary shares held by the Selling Shareholders, representing 55.61% of SFL´s issued share capital. The total price of €759,171,296 was paid in cash to the Selling Shareholders on 10 June 2004. Inmobiliaria Colonial currently holds 19,978,192 SFL ordinary shares, representing 55.61% of the Company´s issued share capital and 58.44% of the voting rights. It does not currently hold any SFL convertible bonds.

Basis of the Offer
The Offer concerns all of the SFL ordinary shares and convertible bonds currently issued andoutstanding that were not held already held by Inmobiliaria Colonial as of the date when the Offer was filed.

Purpose of the Offer
The Offer represents a friendly transaction bringing to a close a process that began when the Selling Shareholders launched a competitive bidding procedure which led to Inmobiliaria Colonial being selected to purchase their SFL shares.

The acquisition of SFL reinforces Inmobiliaria Colonial´s strategy of investing in prime office properties located in the heart of major cities. SFL will give Inmobiliaria Colonial access to an outstanding portfolio of high quality assets in the centre of Paris, which represents an attractive market.

SFL´s properties are located in the prime districts of Paris. The total portfolio is valued at €2,486 million. Offices account for 78% of the total and the remaining 15% consists of retail properties located on the French capital´s best-known shopping streets. These characteristics have enabled SFL to attract a wide range of first-class covenants, and also to enjoy high occupancy rates (currently in excess of 98%).

Inmobiliaria Colonial´s strategy consists of investing in prime office properties in Madrid and Barcelona. In acquiring SFL, the Company is extending its geographic reach to include the Paris market. Paris is currently the largest and most liquid market in the euro area and the outlook for medium-term growth in rental yields is promising.

The combined group will have assets with a total value of some €5,100 million3, including rental properties valued at €4,274 million. Ninety percent of these assets are located in the central business districts of the three cities, breaking down between 57% in Paris, 25% in Barcelona and 18% in Madrid. This diversification across three geographic markets will provide greater choice when it comes to selecting property investments, and will also offer a measure of protection against cyclical fluctuations in property prices. With 81% of the combined portfolio invested in office properties, the new group will be a benchmark player in the three cities´ office markets.

For SFL, the transaction represents an opportunity to combine its assets and experience with those of Inmobiliaria Colonial, one of the leading companies in the euro area in terms of the market value of managed assets. The combined group will be the leading player in the prime office property market in three of the euro area´s most attractive markets (Paris, Madrid and Barcelona), with property management teams among the most experienced in each market.

Source: SFL

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