Helios, the consortium formed by Hines and Grupo Lar, which has launched a takeover bid to take control of the Socimi Lar España, will maintain the investment strategy of the company specialized in shopping centers, although it will change “radically shapes the financing strategy”.
This is how he explains it to elEconomista.es Vanessa Gelado, Senior Managing Director and Country Head of Hines, who points out that the SOCIMI will have “a more efficient capital structure”, but that will also lead to “a radical reduction in the dividend.”
Specifically, Helios’ intention is to bring the loan to value of Lar up to 60%, reaching debt levels of 800 million euros“which means recovering the level of debt that the company had entering Covid” and returning to a “tighter working capital,” says Gelado, who highlights that, in this way, “We optimized the structure with a capital mix made up of less equity and more debt.”
The board is aware that this may come as a surprise “for the company’s traditional shareholder, who has been accustomed to receiving high dividends.” Specifically, in 2023 Lar España approved the distribution of the largest recurring dividend in its history, of 0.79 euro cents per share, with a profitability of 12.3%.
Gelado points out that “after Covid there was a lot of fear towards the sector, however, the reality is that what we have found when we have spoken with Santander and Morgan Stanley – they have endorsed the operation with 624 million – is that there is appetite on the part of the financier because they are seeing how well the assets are performing.”
Helios will benefit from the socimi regime
Helios, which is 62.5% owned by Hines and 37.5% owned by Grupo Lar (historical manager and shareholder with 10% of Lar España), will benefit from the socimi regime next year and “we will be listed in Spain,” says Gelado.
Regarding the investment strategy, José Manuel Llovet, CEO of Tertiary at Grupo Lar, highlights that “the focus will be maintained on Spain” and “we will continue analyzing assets with the capacity to generate value and we will rotate those that have no further potential.”
The takeover acceptance period ends on December 16which at a price of 8.30 euros per share, values the company at 695 million, and It will be settled before the end of the year.
The operation will be financed with a combination of cash contributions received from its shareholders for an amount of up to 299 million. Specifically, Hines will contribute up to 272 million and Grupo Lar up to 27 million which, together with the contribution of its current participation in Lar España, will bring its total investment up to 97 million.
Additionally, there will be a intragroup bridge financing for an amount of up to 139 million to be granted by Hines and a syndicated bank financingof up to 214 million, which will be expandable by 139 million in the event that said tranche is signed with a financial entity before the settlement of the offer to replace the intragroup bridge financing to be granted by Hines.
Currently, Helios has the irrevocable commitment to accept or contribute from some of Lar España’s shareholders such as Castellana Properties, Brandes Investment Partners, Grupo Lar and Eurosazor. In this way, Support for the operation of 50.40% of the shareholders is ensured.
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