Lone Star hires PwC to get Popular´s 30bn in RE assets
D-day has come for the largest Real Estate operation in Spain in the last few years. On Monday 24th at 5pm, investment funds must present their bids for Banco Popular´s real estate assets before the sale´s advisor, Morgan Stanley. Santander is asking 5 bn for 51% of the 30 bn in loans and properties from its branch.
Since this operation began, anticipated by VozPopuli, funds have been working night and day, including weekends, to be able to place a good bid. There’s Apollo, helped by its platform in Spain, Altamira; Blackstone, with Anticipa, the property manager it purchased from Catalunya Banc, and Lone Star. Cerberus also studied bidding.
Despite having two real estate branches in Spain, Neinor Homes (which it owns 40% of) and Hudson Advisors, Lone Star has decided to be assisted in the operation by PwC, according to financial sources consulted by Vozpopuli. This firm knows well Popular´s books as it is its auditor, althought different teams analyze the accounts and advise the fund.
Lone Star, lead in Spain by Mr. Juan Pepa from Argentina, is considered by many the favorite, as it has already showed being able to close successfully large operations in volume, in Spain, like Project Octopus, in which it acquired 4.5 bn in large Real estate and hotel loans in Eurohypo, for 3.5 million.
Apollo, on its part, would be planning to fire all guns in this operation, in which Santander is asking 5 bn, pending the approval of the investment committee and Blackstone is the wild card, as it preferred more a part of the portfolio than 51% of the real estate assets.
Although the offers are to be placed this Monday, the different sources consulted see a lot of variables in this operation. First, due to the little time the candidates had to analyze the Real Estate portfolio from Popular, which has over 130,000 assets between apartments and Collateral from the loans.
Said sources see risky that funds place the 5 bn Santander is asking for without asserting that what they’re buying doesn’t have a nasty surprise. And they add “it’s a very tough portfolio, very big and with very little data and bad assets”. Due to that, it’s not uncalled for that some of the fund stands out applying new discounts to the price or several investors team up to share the risk.
It’s an operation in which Mr. Javier García Carranza, Executive Vice-President of Banco Santander (ex Morgan Stanley) is betting a lot. A sale this year and at a good price of a portfolio in Popular would be a great win for him and vice-versa.
Mrs. Botín commited herself to reduce by half Popular´s exposition to Real Estate in 1.5 years, and Mr. García Carranza believes that it can be done sooner and for all the R.E. assets. Santander risks that offers are lower than the net value of the assets (9.250 bn) which would be a bad sign in the market.
Source: Vozpopuli. Translation by Miguel Vinuesa Magnet.
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