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Investing.com -- Cofinimmo (EBR:COFB) shares surged more than 7% to a two-year high on Friday after Aedifica launched a takeover offer for the Belgian property developer at a significant premium.
The stock was trading at €75.30 as of 09:21 GMT, the highest since May 2023.
Aedifica has proposed an exchange ratio of 1.16 new Aedifica shares for each Cofinimmo share, translating to an implied offer price of €80.91. This represents a 20.8% premium over Cofinimmo’s pre-offer share price.
ING analysts called the offer a “significant premium” and noted that, on paper, the deal makes sense for both companies given the limited discount to net tangible assets (NTA) valuation.
According to ING, the merger would “place the new entity among the top 7/8 real estates listed companies in Europe and creating the fourth biggest healthcare listed real estates group in the world.”
Aedifica expects the deal to deliver mid-single-digit earnings per share accretion, along with annual pre-tax operating synergies of €16 million and potential financial synergies.
The combined group would have a gross asset value of €12.1 billion and an estimated market capitalisation of around €5.8 billion based on pre-offer figures.
This would rank it as the eighth-largest listed real estate investment trust in Europe by market cap and the fourth-largest globally in the healthcare segment, according to the figures presented with the offer.
Barclays (LON:BARC) analysts said they have previously written extensively on how the European Real Estate sector “needs increased scale and liquidity in order to be more relevant globally.”
“We are supportive of the increased scale that would result from this combination.”
Both Aedifica and Cofinimmo operate in the same asset class, with considerable overlap in their tenant portfolios and shareholder bases.
Historically, both companies expanded rapidly through acquisitions financed by a mix of equity and debt. However, that pace of external growth has largely come to a halt following the de-rating of their shares in recent years.
“As such, this route – through the use of its more highly rated paper – would allow Aedifica to continue its growth trajectory and drive earnings accretion through synergies,” Morgan Stanley (NYSE:MS) analysts commented.