A unit of Globalworth Real Estate Investments Ltd. agreed to acquire at least 50.01% and up to 67.90% of the issued share capital of Netherlands-based Griffin Premium RE, by way of a public tender offer at a price of 5.50 Polish zlotys per share, equating to a total cash sum of between 429 million zlotys and 583 million zlotys.
Through the conditional investment agreement, Globalworth Asset Managers SRL will enter the Polish market, where Griffin Premium is listed.
The offer price implies an aggregate equity value for Griffin Premium of 859 million zlotys and represents a premium of 8.5% to the average weighted market price since April 13, the first day of the target company's listing on the Warsaw Stock Exchange. The company said the total consideration will be confirmed upon closing of the tender offer, expected before the end of 2017.
Following completion of the deal, Griffin Premium will be consolidated into Globalworth Real Estate's financial statements and will remain listed in Warsaw, according to a release.
Globalworth Real Estate will fund the transaction using existing cash resources, which totaled €284 million as at June-end.
Griffin Premium owns a portfolio of six office and three mixed-use assets in key Polish cities including Warsaw, Wroclaw, Lodz, Krakow and Katowice. As at June 30, the portfolio, which spans a gross leasable area of 171,000 square meters, had an aggregate value of €508 million, annualized net operating income of €33.9 million, an occupancy rate of 97.6% and a weighted average lease term of 4.5 years.
Griffin Premium's investment pipeline includes a forward funding deal for an office asset in Wroclaw, as well as a 25% stake in three Warsaw offices. All these assets are under development, with completion scheduled over the next two years. The company has also agreed to buy three office properties in Wroclaw, Gdansk and Katowice from Echo Polska Properties for €160 million. That deal is scheduled to close before Jan. 31, 2018.
As of Oct. 3, US$1 was equivalent to 3.67 Polish zlotys.