Prelios holding talks with Fortress and Feidos

The Italian real estate company says it has decided to hold talks with the two parties after examining their proposals.

Prelios, the struggling Italian listed property company with €12. 4 billion of assets, has decided to hold talks with Fortress Investment Group, the New York based firm and Italian company, Feidos, over their offers to inject capital and become new shareholders.

In a statement, Milan-based Prelios said its board had examined the offers regarding a possible “extraordinary” transaction and had decided to proceed with negotiations. The vying offers will now be assessed with Prelios to “fully define” the structure of the transactions, it added.

The update comes as media reports suggest Fortress is planning a €100 million capital injection, consisting of €50 million and another €50 million in assets, while Feidos has offered to inject €150 million into the company, which changed its name in 2010 from Pirelli Real Estate following a large restructuring process. It is still struggling with its debt structure and made a first half loss this financial years of €126 million.

In a statement on Thursday last week, it said financial offers had been received.

That recent announcement followed a statement on August 28 when Prelios responded to reports about a possible corporate deal involving the firm. It said: “Regarding rumors which have appeared in the press about the interest of certain investors in initiating possible partnerships with Prelios, the company confirms…that in July it received some preliminary expressions of interest in possible extraordinary transactions from Feidos and Fortress.

Following the start of discussions, these parties have sent a letter dated 24 August that confirms their interest in completing due diligence and proceeding with the activities aimed at defining the conditions to be able to formulate a binding offer.”

The company added: “In view of the discussions still in progress, the conditions of the extraordinary transactions have not been defined, and so it is not possible at this stage to provide any information as to the transaction’s final structure.”

Prelios has been listed on the Italian stock exchange since 2002 and manages assets in Italy, Germany and Poland. Its portfolio consists of €11.2 billion of physical property assets, while the remaining €1.2 billion consists of non-performing loans. 

Around €5.4 billion of assets are located in Italy, mainly managed through real estate funds via 22 vehicles managed by subsidiary Prelios SGR. Meanwhile in Germany it has €5.6 billion of assets and €100 million in Polish development projects.