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Brookfield subsidiary in €1bn bid for Irish property firm Hibernia

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The board of property firm Hibernia REIT has agreed a cash offer by a subsidiary of global investment giant Brookfield, valuing the firm at around €1,089bn.

he offer, by Benedict Real Estate Bidco, is for €1.60 per share in Hibernia, with a 3.4 cent dividend per share.

It represents a 35.6pc premium to Hibernia’s undisturbed closing price of €1.180 on March 24.

The aggregate value (including the offer price and dividend) of €1,634 per share represents a discount of 5.7pc on Hibernia’s net tangible assets per share at the end of 2021.

The financial terms are final and the acquisition is conditional on approval by Hibernia shareholders, with the Hibernia board saying in a statement it was a “fair and reasonable” offer.

Bidco is a newly incorporated Irish company established for the purpose of the acquisition. It is a subsidiary of one of Brookfield’s real estate private funds. Brookfield is one of the world’s largest owners and operators of real estate with over $250bn of real estate assets globally.

Hibernia specializes in city center office developments and returned to growth and a boost in portfolio value last year as ‘work from home’ restrictions eased and it completed several major deals.

Hibernia REIT chair Danny Kitchen said the acquisition came as the Dublin and London-listed firm continued to trade “at a persistent discount” per share despite “a track record of successfully recycling capital into value accretive opportunities”.

He said it would allow shareholders to realize their investment “at a significant premium”.

“The acquisition recognizes the Company’s prospects and the quality of its portfolio of assets and delivers an acceleration of the value we expect to be created from completion of Hibernia REIT’s major office development projects,” he said.

In December, Hibernia pre-leased 288,500 sqft in its Harcourt Square office development to KPMG Ireland in a 20-year deal that will see KPMG pay initial annual rent of €17m from the start of the lease in 2026.

It also completed the sale of its One and Two Dockland Central properties to Commerz Real AG last year for €152.3m.

Earlier this month, Hibernia announced it was to sell the Forum, a vacant office space on Commons Street in Dublin’s International Financial Services Centre, to a company controlled by Spear Street Capital for €30.8m.

In a trading update in February, it said that Dublin office take-up has continued to recover, led by technology and professional services firms, while over 97pc of its commercial rent for the first quarter had been received.

As at 31 December 2021, Hibernia REIT’s property portfolio was independently valued at approximately €1,327bn.

At the end of December Hibernia’s net debt was €146m, with cash and undrawn facilities of €374m.

Brad Hyler, managing partner and head of European real estate at Brookfield, said his firm was excited to combine its “global real estate expertise with Hibernia REIT’s established operating platform and portfolio of high-quality standing and development assets in Dublin’s most strategic submarkets”.

https://www.independent.ie/business/irish/brookfield-subsidiary-in-1bn-bid-for-irish-property-firm-hibernia-41485810.html Brookfield subsidiary in €1bn bid for Irish property firm Hibernia

Fry Electronics Team

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