The price of units in UniCredito Immobiliare Uno – one of Italy’s largest property funds – jumped after two financial groups announced an offer for around 40% of the fund.
GWM Group and Eurocastle Investment launched a €120m partial voluntary tender offer for approximately 40% of the units.
The offer price per unit equates to €1,850, representing a 13.1% premium over the unit market price, the firms said.
However, the market quickly narrowed the gap, with the unit price trading at €1,807 at midday on Thursday, up around 7.5% from €1,680 before the official announcement of the offer this week.
The 13.1% discount mentioned in the offer refers to the weighted-average market price of the units in the three months before the offer was announced.
Investment companies GWM Group and Eurocastle Investment – a subsidiary of Fortress Group – said the offer underscored their commitment to the Italian property market.
The offer is being launched through the firms’ subsidiaries Europa Plus SCA SIF-RES Opportunity, and Italy Investments.
The tender offer is for up to 604,864 units of UniCredito Immobiliare Uno – a closed-end real estate investment fund managed by Torre SGR and listed on Boors Italiana’s MIV stock exchange.
Torre SGR is 62.5% owned by affiliates of Fortress Investment Group, with the rest owned by Pioneer Investment management SGR.
GMW and Eurocastle said they believed “the fund is comprised of quality real estate assets and that the investment manager’s declared plans for managing the fund are consistent with unitholders realising the full value of the fund’s investments within the term of the fund”.
The implied value in the offer is €300m – far below the fund’s current NAV of €475m.
The firms said the offer also had the advantage of allowing them to make a big investment in the fund by launching a single purchase offer within a reasonable time frame.
The offer would give the fund’s current investors the chance to exit all or part of their investment at a premium over the unit market price, ahead of the fund final term in 2017, they said.
UniCredito Immobiliare Unio is still waiting for approval from the Bank of Italy of its extension to this date, which Torre SGR opted for in November 2013.
The private equity deal is the latest in a series of property investments in Italy for the GWM Group, which has its roots in the country.
In August, it bought the Rome retail park Da Vinci Market Central from AIG/Lincoln for €130m, and in February, funds managed by the group acquired the closed-end fund Clarice.
Clarice holds a portfolio of 70 properties across Italy, which are let to Telecom Italia and worth around €220m.