Dubai talks resume for troubled Spanish real estate company

The Investment Corporation of Dubai is back on track with a potential €3 billion takeover of Inmobiliaria Colonial.

The sovereign wealth fund of Dubai has restarted talks over a €3 billion ($4.6 billion) offer for the embattled Spanish real estate company Inmobiliaria Colonial.

The Investment Corporation of Dubai (ICD) had been unable to reach agreement with Colonial shareholders by the deadline of March 3 having made a conditional cash-plus-bond offer to the company last week.

However, the two largest shareholders in Colonial, Luis Portillo and the Nozar Group, subsequently told Spain’s stock market regulator late yesterday that they were in renewed discussions with the Dubai fund. The two own nearly 40 percent of the Spanish company between them.

Under the terms of the offer last week, the Dubai fund would have bought a 50.1 percent stake before bidding for the whole organization. It said in an offer letter to Colonial that it would pay €1.85 per share to gain control of at least 50.1 percent of the company, mixed with debt worth €2.25 a share, before bidding for the whole company in accordance with Spanish takeover regulations.

Colonial's assets are valued at more than €12 billion, according to its website, mostly from rented office space in Madrid, Barcelona and Paris with some Spanish residential investments. ICD was unavailable for comment at the time of going to press.

If ICD does acquire Colonial, it would be the Dubai fund’s first major investment into overseas markets since its establishment in 2006.