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ADIA JV makes takeover bid for Brazilian RE firm

The Abu Dhabi Investment Authority (ADIA) and GP Investments have made their bid official to take over BR Properties, one of Brazil’s largest publicly-traded real estate companies.

The Abu Dhabi Investment Authority and GP Investments have made their bid official to take over BR Properties, one of Brazil’s largest publicly-traded real estate companies. On Tuesday, BR Properties announced that GP Real Properties II, an investment fund whose sole limited partners are GP Investments and THB, an ADIA subsidiary, had launched a public tender offer to acquire control of the São Paulo-based publicly-listed company, which GP founded in 2006 and exited in 2010.

The tender offer would involve the purchase of at least 112,761,418 common shares, or a 37.81 percent of the company’s stock, and up to 172,407,104 common shares, or 57.81 percent of the company. GP Real Properties II is offering to buy the shares at R$10 a share, or up to a total of R$1.72 billion, for the company. The offer will conclude on May 11, when the auction for the sale of shares will be held.

The offer price is approximately 21 percent higher than the R$8.27 per share closing price on December 10, 2015, when GP and ADIA partnered on the acquisition of approximately 12.19 percent of the company’s common stock from BTG Pactual, the company’s controlling shareholder. On that same date, the joint venture also first announced its intention to conduct the tender offer.

In February, GP Investments disclosed in a statement that it was in advanced negotiations with THB for additional funding to acquire control of BR Properties. Earlier this month, the two parties entered into a binding underwriting commitment to enable the joint venture to have sufficient capital to carry out the tender offer. If successful, the offer would increase GP Real Properties II’s stake in BR Properties to maximum of approximately 70 percent.

The ADIA JV’s tender offer marks the second takeover bid for BR Properties in the space of a year. In February 2015, the company made headlines when it announced that Brookfield Asset Management and Brazilian investment bank BTG Pactual, which already was a 40 percent shareholder in the firm, had launched a tender offer to take control of the company. In July, however, BR Properties disclosed that the takeover bid was not moving ahead because the bidders had failed to meet certain conditions by a specified deadline.

Even after the deal collapsed, BR Properties continued to make headlines in private equity real estate. In August, BR Properties sold 10 warehouse and office properties for R$1.064 billion (€275.8 million, $301.28 million) to The Blackstone Group, and seven new office properties in the cities of Rio de Janeiro and São Paulo to Brookfield Asset Management for R$2.08 billion.