The American investment giant TPG is launching a bid of almost 650 million euros for Intervest Offices & Warehouses. The Belgian top and several major shareholders support the plan.
The American investor TPG makes a voluntary and conditional takeover offer of 21 euros on all shares of Intervest Offices & Warehouses. The stock exchange watchdog FSMA reported this in a press release on Tuesday evening.
The acquisition would be made through the Belgian vehicle European Real Estate Holdings. This recently established company is owned by a Luxembourg company that was established by a TPG fund. TPG (Texas Pacific Group), founded in 1992, has invested in Spotify and Airbnb, among others, and manages assets of $139 billion. In 2009, TPG launched an ‘opportunistic’ real estate investment platform, which today amounts to more than $10 billion.
With the support of TPG, Intervest will be more resilient and benefit from a supportive shareholder who provides access to additional resources.
Trading in Intervest Offices & Warehouses had been suspended since Friday, October 6, when the stock price suddenly shot up 8 percent. At the closing price of the night before (13.80 euros), the real estate company was trading at a very high discount of almost 9 euros or 39 percent on the intrinsic value. The offer of 21 euros implies a premium of 52 percent above the last closing price and a discount of 5.5 percent on the net asset value. Kepler Cheuvreux analysts called an offer of 19.1 to 20.7 euros ‘fair’ last week. There are some conditions attached to the American offer. TPG wants to acquire at least 50 percent of Intervest. If TPG owns 95 percent, it can make a buyout offer and take Intervest off the stock exchange.
The supervisory board and management of Intervest support the bid. “With the support of TPG, Intervest will be more resilient and benefit from a supportive shareholder who provides access to additional resources to execute its strategic plan and achieve sustainable long-term growth,” the company wrote in a press release on Tuesday. Two shareholders, who together own 9 percent of Intervest, also support the offer. This suggests that main shareholder Belfius (8 percent) is also changing tack.
No surprise
The takeover bid for Intervest is no surprise. Rumors of an offer have been circulating in recent weeks. The difficult niche (offices), the high debt ratio (50.1%) and the fragmented shareholding made the company vulnerable. Moreover, the stock price has halved in a year and a half. At the beginning of August, the price was 13 euros, the lowest level since the IPO in 1999.
Profile Intervest Offices & Warehouses
- Regulated real estate company (RREC), founded in 1996 and listed on the stock exchange since 1999. Active in offices and logistics in Belgium and the Netherlands.
- Gross lettable area: 1.3 million square meters.
- Value portfolio: 1.4 billion euros.
- Shareholders: Belfius (8%), Allianz (5%), Patronale (4%), free float 79%.
- CEO: Joel Gorsele.
Intervest was initially a specialist in offices, but is increasingly focusing on logistics. The portfolio today consists of 50 percent logistics real estate in Belgium, 25 percent logistics real estate in the Netherlands and 25 percent office buildings. While the logistics sites are full and in high demand, the company is struggling with a low occupancy rate of 82 percent for its offices.
Sales process
The often outdated offices, largely located around Mechelen, Antwerp and Brussels, are Intervest’s major stumbling block. The heavy office legacy, including feared write-downs, repelled potential acquirers, such as listed competitors Montea and WDP, who also looked at the file.
Gunther Gielen, the former CEO of Intervest, announced in February that the company wanted to sell offices for 150 million euros. But Gielen was surprisingly fired at the end of March and replaced by investment director Joël Gorsele. In recent months, Gorsele was only able to announce the sale of two office buildings in the Brussels periphery for 7.2 million euros.