SFL – Announcement by Colonial of a project to increase the capital of SFL and of a voluntary takeover bid for SFL shares
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PARIS – (BUSINESS WIRE) – Regulatory news:
The Board of Directors of SFL (Paris: FLY) examined the terms of a two-part transaction project:
On the one hand, a liquidity offer to SFL shareholders through a simplified mixed takeover bid, initiated by Colonial, the Company’s majority shareholder, relating to SFL shares not yet held by Colonial and Predica ; the terms of the Offer would be 46.66 euros and 5 ordinary Colonial1 shares for one SFL share tendered to the Offer2; and
On the other hand, the evolution of the existing partnership between SFL and Predica, consolidating their long-term relationship. This part would consist of the acquisition by SFL (as part of its buyback program) followed by the cancellation of part of the SFL shares held by Predica (7.86% of SFL’s capital) and the acquisition by SFL of the stakes held by Predica in the Washington Plaza, 106 Haussmann, Galerie des Champs-Elysées and 90 Champs-Elysées3 assets, in exchange for minority stakes in the # cloud.paris, Cézanne Saint-Honoré, 92 Champs-Elysées and 103 assets Grenelle. The balance of SFL shares held by Predica (5% of SFL capital) would be exchanged for Colonial shares at the rate of 9.66 Colonial shares (excluding coupon) for 1 SFL share (coupon attached).
These transactions would be carried out on financial terms based on the EPRA net asset value (“EPRA NDV“) as of December 31, 2020 (adjusted for dividend distributions for fiscal year 2020).
The development of the partnership with Predica remains subject to the usual conditions precedent including waiver by the competent municipal authorities of their right of preemption, AMF approval decision on the Offer, approval by Colonial’s general meeting of the issuance of Colonial shares with the contribution of Predica shares and within the framework of the Offer and the absence of any significant loss on the assets concerned by the exchange operations. The Offer is subject to approval by the general meeting of Colonial for the issuance of Colonial shares under the Offer.
The operation would simplify the shareholder structure of the Company, by offering liquidity to minority shareholders and the possibility of becoming shareholders of Inmobiliaria Colonial, by contributing their SFL shares at a significant premium over the stock market price.
Since the Offer must not be followed by a squeeze-out, shareholders who do not wish to tender their shares may remain invested in a company whose financial profile will not be significantly changed and may benefit from a higher dividend due to the distribution of the obligation activated by the capital gains that will be recorded as part of the transaction.
This operation is part of the Company’s strategy and is part of a logic of continuity.
In accordance with the AMF’s general regulations and good corporate governance practices, the Board of Directors has set up a ad hoc Committee composed exclusively of independent directors of the Company to examine in detail the planned transactions and advise the Board of Directors.
Finexsi was appointed by the Board of Directors, on a proposal from the ad hoc Committee, as an independent expert to provide:
a report on the fairness of asset exchange transactions (as a regulated agreement) and on the use of the share buyback program, in accordance with AMF position 2012-05 on general meetings and AMF position 2017- 04 on the repurchase of back shares, and
a report on the financial conditions of the Offer in accordance with article 261-1 of the AMF general regulations.
The report on the exchange of assets and the use of the share buyback program, based on the work of the expert and the information provided by the Company, concluded that these transactions were fair. a financial point of view for the shareholders of SFL, does not affect the financial situation or the investment capacity of the Company and, within the framework of a global transaction, complies with the principle of equal treatment of shareholders.
In accordance with stock market regulations, Finexsi will submit its final report on the terms of the Offer as an independent expert, after a minimum period of fifteen trading days (from the date of filing of the Offer).
the ad hoc The Committee issued a favorable opinion on the asset swaps and recommended that the Board of Directors approve them.
Regarding the Offer, the Board of Directors noted after prior examination of the main terms of the Offer that it would offer liquidity to minority shareholders with a significant premium of 45% compared to the stock market price of June 2, 2021.
On this basis and on the basis of the recommendation of ad hoc Committee, the Board of Directors approved the development of the partnership, and welcomed the principle of the Offer and the possibility offered to minority shareholders to benefit from liquidity with a significant premium over the stock market price. The reasoned opinion (“reasoned opinion“) of the Board of Directors will be issued, on the recommendation of ad hoc Committee, after receipt of the final report of the independent expert on the terms of the Offer.
The Offer should be filed in the coming days. SFL’s Board of Directors could thus meet at the end of June to issue its reasoned opinion after receipt of the Finexsi report as an independent expert on the Offer. The Offer could thus be opened during the month of July, subject to the AMF’s authorization decision.
the ad hoc Committee and the Board of Directors were advised by Natixis Partners as financial advisor and by Bredin Prat as legal advisor. SFL was advised by Gide Loyrette Nouel as legal counsel.
1 For Colonial, a dividend relating to fiscal year 2020 of 0.22 euro per share was declared and paid.
2 For SFL, the dividend relating to fiscal year 2020 of 2.10 euros per share was paid on April 27, 2021.
3 The companies SCI Washington (representing 34% of the capital and voting rights) and Parholding SAS (representing 50% of the capital and voting rights).
Leader in the premium segment of Parisian commercial real estate, Société Foncière Lyonnaise stands out for the quality of its real estate assets, valued at 7.5 billion euros and centered on the Central Business District of Paris (#cloud .paris, Edouard VII, Washington Plaza, etc.) and for the quality of its client portfolio, made up of prestigious companies in the consulting, media, digital, luxury, finance and insurance sectors. The oldest real estate company in France, SFL demonstrates year after year an unwavering commitment to its strategy focused on creating high use value for users and, ultimately, substantial appraisal values for its properties.
Stock exchange: Euronext Paris Compartiment A – Euronext Paris ISIN FR0000033409 – Bloomberg: FLY FP – Reuters: FLYP PA
S&P Rating: BBB + stable outlook