PARIS - Bloomberg
Gazit-Globe said it completed its purchase of Meinl European Land with Citigroup, boosting properties under its management by 40 percent and its asset value by 71 percent.
The acquisition agreement, that renamed the third-largest Austrian property developer Atrium European Real Estate, sets out staged investment by the new owners.
Gazit-Globe, an Israeli developer of commercial real estate, said in a statement to the Tel Aviv Stock Exchange yesterday that it invested 270 million euros ($420 million) in the first stage alongside a 230 million-euro investment by Citigroup. Overall funding will reach 1 billion euros.
Meinl put itself up for sale last year after a botched share buyback led to a 52 percent drop in the stock. Austrian regulators have fined Meinl for misleading investors about the size and timing of the 1.8 billion-euro repurchase. The Jersey Financial Services Commission said July 14 that it will investigate whether the company broke the law.
Following the deal, Gazit holds 54 percent of Atrium, and Citigroup 46 percent. Properties managed by Gazit increased to 657 from 471, and asset value of the real estate company rose 71 percent to 72 billion shekels. With Atrium, Gazit's annual rental income rose 68 percent to 6.2 billion shekels.
Gazit's bonds were lowered to AA-/Stable at S&P Maalot and the bonds of its controlling shareholder Gazit Inc. were cut to A+/Stable.