Ireland’s Hibernia REIT said on Friday that its board unanimously recommended shareholders accept a €1.09-billion ($1.5-billion) takeover bid by a subsidiary of Canada’s Brookfield Asset Management.
Ireland’s largest stock market-listed office landlord said the offer price represents a 35.6-per-cent premium to Thursday’s €1.18 closing price.
Hibernia said its share price had consistently traded at a discount to the value of its property portfolio since its 2013 stock market flotation, the same complaint that prompted the €1.34-billion ($1.83-billion) sale of local rival Green REIT to Britain’s Henderson Park in 2019.
Hibernia, which has a €1.3-billion ($1.78-billion) property portfolio and tenants such as Twitter, Deloitte and U.S. software company HubSpot, said its shares had traded at a 21-per-cent average discount to its net asset valuation (NTA) over the last 5 years.
Its board listed a number of reasons for this, including expected near-term pressure on earnings while it redevelops income generating assets, the relatively low levels of liquidity in its shares, recent changes to the Irish REIT taxation regime and uncertainty over future office demand.
The offer therefore represents a 5.7-per-cent discount to its independently valued NTA per share at the end of last year, said Hibernia, which raised €385-million ($527-million) at IPO in 2013 and a further €300-million ($411-million) a year later.
The takeover will be completed by Benedict Real Estate Bidco Ltd., a newly incorporated Irish subsidiary of one of Brookfield’s real estate private funds that has been established for the purpose of undertaking the acquisition.
Credit Suisse and Goodbody Stockbrokers advised Hibernia on the deal. Goldman Sachs, J.P. Morgan Cazenove and Societe Generale acted as financial advisers to Bidco.
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