Gazit-Globe in a Major, Strategic Transaction: Acquires Norway's Sektor Through Its Subsidiary, Citycon, for EUR 1.47 Billion...
25 May 2015 - 2:36PM
Gazit-Globe (NYSE:GZT) (TSX:GZT) (TASE:GZT), one of the world's
leading multi-national real estate companies focused on the
management, acquisition, development and redevelopment of
supermarket-anchored shopping centers in major urban markets,
announced today that its subsidiary, Citycon (42.8%), entered into
an agreement to purchase all of the shares of Norway's second
largest commercial real estate company, Sektor Gruppen, for
consideration amounting to approximately EUR 1.47 billion subject
to customary balance sheet and post-closing adjustments. The
consideration will be paid in cash (approximately EUR 541 million)
and by the assumption of debt. Citycon will become the largest
publicly-listed shopping center company in the Nordic region and
the third largest in continental Europe.
Sektor Gruppen is a private company focused on the development
and operation of supermarket- anchored shopping centers in Norway.
The majority of its assets (95%) are located in the three main
economic centers of Norway - Oslo, one of the fastest growing
cities in Europe, as well as in Bergen and Stavanger, two major
growing cities bordering the North Sea. Total assets under
management exceed 600,000 sqm of which approximately 400,000 sqm
are owned by Sektor. Sektor's revenues in 2014 were EUR 127 million
and its net operating income amounted to approximately Euro 75
million. The net initial yield of the assets is approximately 5.2%
with the potential for substantial organic growth, which is
expected to be accretive to Citycon's earnings per share from 2016.
As of December 31, 2014, the Sektor portfolio had an occupancy rate
of 96.5%.
Citycon intends to finance the acquisition through a rights
issue of approximately EUR 600 million, a EUR 250 million bridge
financing facility obtained from a syndicate of Nordic banks, and,
if necessary, from existing credit facilities. In addition, waivers
have been obtained for approximately EUR 671 million of the
existing bank financing facilities of Sektor to remain in place
upon closing. The closing of the transaction is expected to take
place in July 2015.
Gazit-Globe has provided a commitment to subscribe for its pro
rata share (42.8%) in the rights offering, approximately Euro 257
million, while the second largest shareholder in Citycon, Canada
Pension Plan Investment Board, CPPIB (15.0%), which is the largest
pension fund in Canada, has also committed to participate in its
pro rata share of the rights issue. The transaction advisers are JP
Morgan, SEB and Pangea Property Partners.
Based on on-going discussions between Citycon and there crating
agencies, Citycon expects that its current credit rating (BBB from
Standard & Poor's and Baa2 from Moody's) will be maintained
after the transaction, subject to the expected rights offering and
other terms related to the transaction.
Chaim Katzman, Chairman of Gazit-Globe and
Citycon: "This major, strategic transaction further
strengthens Gazit-Globe's position as one of the most significant
players in the global shopping center industry as well as
demonstrating our ability to enter into new and attractive markets,
including AAA rated countries with high barriers to entry, and
become a market leader, while further enhancing our portfolio
diversification and our cash flow."
Katzman added: "With this transaction, Citycon
continues to establish its position as the leading European
shopping center company active in the Nordic region and the third
largest in continental Europe as it increases its asset value to
approximately EUR 5 billion. Upon completion, Citycon's portfolio
will benefit from the entry into Norway, an economy with one of the
highest incomes per capita in the world, which now will comprise
30% of Citycon's portfolio and approximately 7% of
Gazit-Globe's."
About Gazit-Globe
Gazit-Globe is one of the largest owners, developers and
operators of predominantly supermarket-anchored shopping centers in
major urban markets around the world. Gazit-Globe is listed on the
New York Stock Exchange (NYSE:GZT), the Toronto Stock Exchange
(TSX:GZT) and the Tel Aviv Stock Exchange (TASE:GZT) and is
included in the TA-25 and Real-Estate 15 indices in Israel.
Gazit-Globe owns and operates 524 properties in more than 20
countries, with a gross leasable area of approximately 6.3 million
square meters and a total value of approximately US$ 21
billion.
FOR ADDITIONAL
INFORMATION |
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Contact: press@gazitgroup.com |
Gazit-Globe Headquarters: Tel-Aviv, Israel,
Tel: +972 3 6948000 |
FORWARD LOOKING STATEMENTS
This release may contain forward-looking statements within the
meaning of applicable securities laws. In the United States, these
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such statements
involve a number of known and unknown risks and uncertainties, many
of which are outside our control, that could cause our future
results, performance or achievements to differ significantly from
the results, performance or achievements expressed or implied by
such forward-looking statements. Important factors that could cause
or contribute to such differences include risks detailed in our
public filings with the SEC and the Canadian Securities
Administrators. Except as required by applicable law, we undertake
no obligation to update any forward-looking or other statements
herein, whether as a result of new information, future events or
otherwise.
CONTACT: For additional information:
Gil Kotler,
Senior Executive VP and CFO
Gazit-Globe Ltd.
1 HaShalom Rd.
Tel Aviv, Israel 67892
+972 3 694 8000