December 16 (SeeNews) - Bucharest-listed real estate investment trust (REIT) New Europe Property Investments [BSE:NEP] said it will merge with South African commercial property investor and developer Rockcastle and create a new entity, NEPI Rockcastle PLC, registered in the Isle of Man.
The transaction will have an exchange ratio of 4.5 Rockcastle shares for 1 NEPI share, NEPI said in a statement filed with the Bucharest Stock Exchange BVB on Thursday. The merger is scheduled for completion by end-June 2017.
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The market capitalisation of NEPI stands at 3.4 billion euro ($3.55 billion), while Rockcastle's is 2.2 billion euro. NEPI Rockcastle PLC is expected to have a substantially enlarged market capitalisation and the two companies' shareholders will benefit from enhanced liquidity, NEPI said.
"The merged entity is expected to become the largest listed real estate player in CEE. Exposure to high-quality listed and liquid global real estate securities will lead to a diversified risk profile. The transactions will also see the integration of two complementary management teams, positioned to unlock strategic synergies and create further value for both NEPI and Rockcastle shareholders," NEPI added.
NEPI is an Isle of Man-based company investing primarily in the high quality office, retail and industrial property market initially in Romania and thereafter in other Central and Eastern European countries. Its total investment property portfolio was valued at approximately 2.5 billion euro at end-November.
NEPI’s portfolio in Romania includes projects such as Mega Mall, Iris Titan Shopping Center, Promenada Mall and Vulcan value Centre in Bucharest. The company also developed projects in the industrial sector, such as Rasnov Industrial Facility and Otopeni Warehouse. In the office real estate market NEPI owns Floreasca Business park, The Office and Lakeview.
Rockcastle is a commercial property investor and developer that owns, develops and manages dominant retail assets in the CEE region and invests in global real estate listed securities. As of September 30, Rockcastle’s portfolio of investment properties comprised 7 income producing properties, 2 developments under construction and 3 properties under permitting and pre-leasing, valued at 878.6 million euro. The portfolio includes assets in Poland, the Czech Republic and Zambia.
NEPI is also listed on the Johannesburg Stock Exchange (JSE). Rockastle is listed on JSE and the Mauritius Stock Exchange (SEM).
($ = 0.9569 euro)