July 20, 2007
Chronicle of the First Tender Offer on Brick
Berenice Fondo Tecla Offices and Fund Offices are two mutual funds closed real estate, specializing in commercial / office segment, publicly traded on the MTF segment respectively in July 2005 and March 2004 and managed by Pirelli RE SGR . In essence, these two funds hold and manage properties from office Telecom and Pirelli.
On May 22, 2007, it was stated, for the first time in Italy, this type of Funds, launching a takeover bid, by the company Gamma RE bv. On June 9, 2007 were published on the Offer Documents, as follows:
- Offer full voluntary public purchase shares Berenice Fondo Offices , with the consideration offered for each share of € 540.00.
- full voluntary public takeover offer shares Tecla Fondo Offices , with the consideration offered for each share of € 590.00.
For both, the period of validity of the offer provided was as follows: 11/06/2007 - 02/07/2007.
As stated in the prospectus of such tender offer, was a potential conflict of interest for Pirelli RE SGR: Pirelli RE SGR was 100% owned by Pirelli RE, which held, by Pirelli RE Netherlands, 49% of the capital of the Offeror (Gamma RE bv).
The offeror, as already mentioned, was Gamma RE BV a Dutch company, established as a BV (" besloten vennootschap met beperkte aansprakelijkheid , limited liability company) with headquarters in Amsterdam.
In m Otivar Offer you read that 'Agency believed that the shares represented a favorable investment opportunities . In particular, the operation could have been framed in plans to build a platform for investment in offices, which were conferred on the shares tendered in the Offer, together with other portfolio investments in real estate and development initiatives in the same sector. Another motivation was to quote if this "platform." With reference to this last point, Gamma was studying various alternatives, including analysis of potential opportunities offered by the regulations on listed property investment company, in Italy or abroad, the creation of a company under foreign law whose shares could be traded on a market with higher liquidity for companies operating in the real estate industry which, For example, the English or Dutch.
Monday, 18.06.2007 Whitehall , global investment fund specializing in real estate, announced the intention to launch, under Article 102 paragraph 1 of the D. Decree Law 58/98, two offers of voluntary public purchase through a dedicated vehicle, with the subject Fund shares Tecla and Berenice Fondo Offices Offices. Whitehall and the Union Generale Immobiliare, a company controlled by Francesco Gaetano Caltagirone, would create a common platform for pursuing investment opportunities in the Italian property market. In this context, subject to successful bids in the terms presented, Unione Generale Immobiliare have owned minority stakes in the funds Tecla and Berenice, alongside the vehicle in Whitehall. Zwinger OPCO 6 BV The company was the vehicle used to launch a counter offer.
Again, the Agency was a Dutch company formed on January 2
Tecla The offer was subject to 633,658 shares of the Fund Tecla, the value nominal € 447.79 each, equal to the total shares issued minus the obligatory participation of 2% (12,932 shares) held by the fund manager in accordance with the provisions of the law. The shares being offered are therefore approximately 98% of all issued shares of the Fund Tecla.
Berenice The offer was subject to 570,000 shares of the Fund Berenice, a nominal value of € 497.55 each, equal to the total shares issued minus the mandatory contribution of 5% (30,003 shares) held by the fund manager in accordance with the provisions of the law. The shares to be offered therefore accounted for approximately 95% of all issued shares of the Fund Berenice.
The agency acknowledged to each member of the offers: 1) for Berenice Fund, a cash consideration of € 650 per share, a premium of 20, 4% of the public purchase offer by Gamma RE launched at a premium of 37.4% over the weighted average of official prices for the last 12 months until May 18, 2007 and at a discount of 5.1% compared to net asset value per share at December 31, 2006 net of dividends, 2) the Tecla fund, a cash consideration of € 650 per share, a premium of 10.2% in the public purchase offer launched by Gamma RE and a premium of 23.0 % over the weighted average of official prices for the last 12 months until May 18, 2007 and at a discount of 4.1% compared to net asset value per share 31 December 2006 net of dividends. The maximum aggregate bid was therefore € 370 million for the Fund and Berenice € 412 million for the Fund Tecla.
Tenders vehicle Whitehall have been qualified as compared to competing offerings range of RE, therefore, holders of shares of shares Tecla and Berenice, on the date of commencement of the acceptance period of the tenders had already given their shares in acceptance of tenders Gamma RE, had the opportunity to withdraw these initial adhesion and to confer membership in the Whitehall tenders its shares, thus benefiting from a higher fee.
Tenders vehicle Whitehall were conditioned to the achievement of possession of majority of the shares and the non-occurrence of acts or circumstances that could counter the outcome or be detrimental to the success of the same. Whitehall reserved in any case to waive those conditions.
Whitehall was convinced that the value of the shares could be maximized through active management of the Fund's real estate fund Berenice and Tecla.
as intermediaries in charge of coordinating the collection of accessions have been designated BNP Paribas and MPS Finance Banca Mobiliare. Goldman Sachs International acted as exclusive financial advisor to Whitehall.
In summary
At this point it expected reaction Gamma RE bv , who promptly arrived content with the revival in Supplement to the Offer Document Voluntary Public totalitarian under Article 102 D. Legislative Decree No. 58/1998. As for the Berenice unit price offered was equal to Euro 685.00 per share, compared with an originally offered amount of Euro 540.00 per share. While the Tecla The unit price offered was $ Euro 690.00 per share, compared to originally offered a price of Euro 590.00 for each installment and the date by which it was possible to accept the Offer, originally scheduled for 17:40 of the July 2, 2007, was extended to 17:40 hours of July 5, 2007.
In the case of Berenice, the the consideration offered was superior to Euro 145.00 (ie by 26.85%) compared to the initial consideration and consideration offered was aligned to Net asset value of the Fund at 31 December 2006 attributable to each share - net income for the second half of 2006, distributed by the Fund on February 8, 2007 - 684.64 Euro. The price offered was, however, lower by 4.1% compared to the total net value of the Fund at 31 December 2006 attributable to each share of Euro 714.16.
In the case of Thecla, the consideration offered was superior to Euro 100.00 (ie by 16.95%) than the original amount and the consideration offered a premium of ' 1.8% of the overall value Fund's net assets at 31 December 2006 attributable to each share - net income for the second half of 2006, distributed by the Fund on February 8, 2007 - 677.85 Euro. The price offered was, however, lower by 2.1% compared to the total net value of the Fund at 31 December 2006 attributable to each share of Euro 704.91.
the net asset value of the Fund expresses the fundamental value of the Fund defined as the difference between the market value of assets and the value of liabilities.
not end here , with no warning 11426 of 21/06/2007 concerning: relaunch announced tender offer, Zwinger announced to revive its offer in the following way: for Berenice from 650 € to 725 €, for Thecla, 650 € to 680 €. In particular, with regard to the Fund Berenice, the 'Agency Zwinger OPCO 6 BV, a company vehicle for the Whitehall Funds Goldam Sachs and Caltagirone, published on 23 June document full voluntary tender offer with a price per share offered to Euro 725.00 for each share d URATION of the acceptance period to 'offer and agreed with the Italian Stock Exchange from 2 July 2007 to July 20, 2007, inclusive, from 8:30 to 17:40, unless extended. Following this re-raise you come to an agreement between the two contenders (in fact, not formalized): Gamma RE, a joint venture between Pirelli RE and Morgan Stanley would not have aumenteto its offer on Berenice fund, while Zwinger OPCO 6 bv the Fund would not have raised Tecla. Therefore Zwinger which has been awarded Berenice, to whom he had offered more, and Gamma RE Fund Tecla. To sum up the latest offer from Gamma RE was 690 euro for Tecla and Berenice for € 685, while Zwinger offered € 680 to € 725 for Tecla and Berenice.
in the offer document of the Zwinger some agreements were announced on June 18, 2007 (as amended on June 20, 2007, only to take into account the increase of the Consideration) with Union Generale Immobiliare SpA
Under Investment Agreement, subject to the success of the offer, each party was granted another option to purchase or sale (as appropriate) on a quantity of shares equal to 30% of the shares that were held at the conclusion of the Offer. Then the exercise of options, the parties would negotiate the terms of an agreement aimed at regulating their respective rights to vote in the Assembly of the participants of the Fund and the functioning of its Advisory Committee. The Investment Agreement also provided that, within the limits permitted by law, and subject to necessary approvals, the parties would make sure that was recognized by the fund manager of the Fund at UGI a "right of first offer", in relation to the sale of the following property situated in Rome in Via Bissolati 76, Corso Italy 43, Via Tevere 50, Via Sicilia Via Tomacelli 146 and 162.
On July 5, 2007, concluded with the successful takeover of the Gamma RE Tecla real estate fund. In its press release issued on July 6 we read that at the end of the Offer, the shares held by Gamma RE amounted to more than 86% of the shares with voting rights. In particular, were handed over 369,138 shares, which were added to 177,122 already owned by Gamma RE.
The value of the shares tendered flow amounted to about EUR 255 million. This amount was financed from the resources of joint venture and funding provided by Morgan Stanley, which is flanked by Intesa Sanpaolo and Unicredit Group.
looked all over: now Gamma RE was Tecla and Berenice was going to Zwinger, but it was not the case.
On July 6, 2007 , with no warning 12614 as the sender with Galante and relate to: OPA - Press Print, was announced in full voluntary takeover bid launched by Galante S.à RL Berenice 570,000 shares - Fund offices at a price of € 760.00.
Galante was S.à RL be a Luxembourg company, provided in the form of S.à rl ( société à responsabilité limitée ) based in Luxembourg on 8-10 Rue Mathias Hardt. The share capital subscribed and fully paid, amounted to Euro 12.500,00 and was represented by 500 shares each having a par value of Euro 25.00. This capital was directly and wholly owned by Merrill Lynch Holdings Luxembourg S.à rl (headquartered in 8-10 rue Mathias Hardt, Luxembourg) and indirectly and wholly owned by Merrill Lynch & Co.Inc., Which then controlled Galante S.à RL by law.
Again, the Agency found that the shares represented a favorable investment opportunities. Moreover, in order to maximize the value of the shares of the Fund Berenice, Galante said that they intend to dispose of a package of five properties, namely those of the Whitehall-Zwinger-UGI, at a price not less than a total of 300 million euros.
In a press release dated July 10, 2007 , the Board of Directors of Pirelli RE SGR repeatedly noted the interest expressed in relation to five properties owned by the Fund Berenice located in Via Roma Bissolati 76, Italy 43 Corso, Via Tevere 50, Via Sicilia Via Tomacelli 146 and 162. This interest was first expressed in the offer document of the Zwinger OPCO 6 BV and then, by Galante. Therefore, the Board of Directors of Pirelli RE SGR - the light of the interest expressed by the two bidders, taking into account the observations made by Pirelli RE SGR in the same release of the Zwinger on the fact that the "right of first offer" would give a vantage to a shareholder with potential harm to the potential for maximizing the value of the sale of real estate - after hearing the opinion of the Advisory Committee voted unanimously in favor, stated that he intended to start, in line with the business of enhancing the portfolio , a competitive sale process for the transfer of listed buildings, to which were invited the major stakeholders, including UGI
Some of these properties were leased to Telecom, the other to the Public Administration.
On July 11, 2007 , with no warning 12841, came the revival Zwinger, which raised its offer to 762 euro per share in cash from the previous 725, indicating that it has established a supplement to the Information Offer Document, which was published on June 23, 2007. This offer was higher than 2 euro per share bid on 6 July Galante-Merril Lynch. The price of 762 € 11 expressed a premium, 3% of NAV. With the press release was also responded to the decision of the Board of Directors of Pirelli & CRE Sgr SpA, claiming it was going to Zwinger the effectiveness of the Offer subject to the additional condition that Pirelli & CRE Sgr SpA to issue no later than July 18, 2007 a press release to the market where
On July 12, 2007 , Galante S.à RL communicated to Consob the intention to increase the unit price offered for each share of the fund Berenice from 760 € to 770 € for a maximum outlay in the event of accession totalitarian of € 436,995,020. The consideration was 1% higher than the offer launched by Zwinger OPCO and a premium of 54.1% than the prices of the Fund at May 18, 2007, the last trading day before the launch of the Gamma RE.
in the offer document is some news that did emerge pointed to the presence of relationships between the group Pirelli RE and Merrill Lynch. The the Mr. Reginald Bartholomew, who was appointed as independent members of the Board of Directors of Pirelli RE for the period ending with the approval of the budget at 31 December 2007, was also Vice Chairman Merrill Lynch Holdings Limited, a company belonging to the Group Merrill Lynch. Merrill Lynch Holdings Luxembourg S.à rl, belonging to the Merrill Lynch Group and holder of the share capital of the Offeror, held from June 2006 to 65% of Alnitak S.à rl, a company active in tourism and the remaining 35% was held by Pirelli RE.
Merrill Lynch International Bank Limited, the same group as the Offeror has been part of the consortium which funded the Lime and Lime II joint venture company involving, even if in a minority, even companies in the Pirelli Group.
Group Merrill Lynch held on the date of publication, 5% of the total shares of the Fund "Pirelli RE - Cloe Office Fund - Mutual Fund closed real estate" , fund managed by Pirelli RE SGR. Merrill Lynch, the Group acquired the shares in June 2004.
Merrill Lynch International Bank Limited, acted together with other banks, as bank lending fund Berenice, by signing in June 2005, approximately one third of financial-necked in the Contribution Fund, the latter totaling approximately Euro 450 million.
On July 13, 2007 , Zwinger SGR required to make available to the market, all available data on the assessment of property of the Fund and its evaluation process, including all information, reporting and resolutions that form the basis of the reports already published in part.
the same date the prospectus was published in the challenger Galante S.à RL July 12, received the go-ahead by Consob. Meanwhile, the time to accept the offer of Galante S.à RL-Merrill Lynch were found in the dates between July 20 and August 9, 2007.
In the absence of other competitors, was identified in the July 26, the final day to make further bids, and put an end to this saga. Here's why:
- Article. 35 paragraph 1 letter. A) of the Regulations for Issuers "days" must be understood as the opening days of regulated markets;
- art. 44 paragraph 4 of that Regulation stipulates that "the bids must be made within five days from publication competing offer, or an earlier revival of another bidder. "So Zwinger has the opportunity to do a re-raise by 20 July (five days after the date of publication of that Galante was July 12) and Galante has the opportunity to answer, but with a time limit, that of paragraph 5.
- under subsection 5 of that article, it is expected that no recovery can be made more than the tenth day prior to the closing of the acceptance period of the last offer. Moreover, the last day useful to all bidders can make an additional raise, prior notice to Consob. In this case calendar in hand, July 26 is the "final day" in which all bidders can make an additional raise, since August 9 on the last day to accept the offer Galante.
In a statement dated July 16, 2007 , Pirelli RE SGR, in response to the request of the Zwinger OPCO 6 BV, stated that he had failed to provide appropriate responses, stating, inter ' alia, that the information necessary for an accurate assessment of the assets of the fund Berenice were already contained in the prospectus prepared in the placement in the fund statements and supporting documentation. Of the reasons in support of the resolutions adopted by the Board relating to the proposed sale of five properties in Rome, it was stated that those sales, although provided for in business plan since the end of the liquidation, were not part of the divestiture plan for 2007. However Pirelli RE SGR considered appropriate to test the ability to seize new market conditions that had come to create a result of the interest shown in their bid documents by Zwinger OPCO 6 BV and Galante S.à rl.
The Board of Directors has authorized the Chief Executive Officer to define in detail the procedure for the sale in compliance best practices of market timing and related subject to approval by the council to be held very soon.
After approval by the Council, the resolutions in respect of existing legislation, will be promptly disclosed to the market. Pirelli RE SGR has confirmed that the sale will be in the form of competitive bidding with the base bid price of Euro 300 million. Pirelli RE SGR considered that a competitive bidding process open to all the major operators, including Union General Real Estate, allow us to maximize the proceeds of sale in the interests of all participants in the Fund. The procedure will not be invited or Pirelli RE companies in the group controlled by it.
With No Warning 13239 of July 17, 2007 , Board of Directors of Pirelli RE stated that it had resolved to make his own changes to the Rules of the Fund in terms of increased powers of the Consultative Committee request that was made by both Zwinger that Galante. also took note of the report for determining the market value of real estate fund Berenice to June 30, 2007, prepared by an independent CB Richard Ellis. The total market value for the 51 properties in the portfolio to the fund Berenice has been estimated at approximately € 845 million, an increase of 5.3% compared to December 31, 2006, which was divided into an average increase of ' 11.3% for the five real estate sites in Rome and object of the purchasing process communicated to the market, and an average increase of 2.9% for the remainder of the assets. In particular, the studies had revealed a total market value for the 5 properties of Rome approximately 260.8 million euro, divided as follows: € 65.8 million for the building in Via Bissolati 76, 71.6 million Course in Italy for the 43, 34.1 million for the one in Via Tevere 50, Via Tomacelli 45.6 million for the 146 and 43.7 million for the one in Via Sicilia 162.
On July 18, 2007 , Zwinger announces the relaunch. The figure which is of 771 €, one more than it has offered Galante, nine above the € 762 raised by the same Zwinger in the previous round. At this point, the immediate effect is that the acceptance period Op launched by Zwinger, concurs with that of Galante, which runs until August 9. In fact, paragraph 6 of Article 44 of Consob Regulation states: " The acceptance period of the tenders and the planned date for publication of the results are in line with those of the last competing offer, unless the bidders before, within five days from publication of the competing offer, notify Consob and the market you want to maintain the original deadline, in which case they can not make bids. "Zwinger has not used that option.
However, this revival does not seem to be a real thrust decisive, but it seems to take more than the technical meaning of a skirmish. The press release containing the raise to 771 was published on July 19 with no warning 13385. Therefore, from July 19, taking 5 working days in which Merrill Lynch would raise the price of its offer and you get so July 26. But at the same time, just that day, will start the ban raises provided in the 10 days preceding the conclusion of tender offer: in this case, August 9. Merrill Lynch may then choose not to bid and wait for it to arrive July 26 in which in which all bidders can make an additional raise in a sealed envelope to Consob.
Luca Marotta
