Gazit Globe Offer to Acquire All Minority Shareholder Interests in Subsidiary Atrium Has Not Been Approved
26 October 2019 - 1:41AM
Gazit Globe (TASE: GZT), a leading global real estate company
focused on the ownership, management and development of mixed use
properties in urban markets, announced today that its offer to
acquire the entire issued, and to be issued ordinary share capital
of Atrium European Real Estate Limited (VSE/Euronext: ATRS)
(“
Atrium”) that is not already owned directly or
indirectly by Gazit-Globe Ltd or its subsidiaries Gazit Gaia
Limited and Gazit Midas Limited ("
Gazit") has not
been approved by the majority of Atrium minority shareholders.
On 23 July 2019, Atrium announced that the
Independent Committee of the Board of Directors of Atrium had
reached an agreement with Nb (2019) B.V., which is an indirect
wholly-owned subsidiary of Gazit, on the terms and conditions of an
all cash acquisition of the entire issued, and to be issued
ordinary share capital of Atrium that is not already owned directly
or indirectly by Gazit to be implemented by a court sanctioned
scheme of arrangement under Jersey Companies Law (the
“Acquisition”) for EUR 3.75 per share in cash (the
“Offer Price” and such offer being the
“Gazit Offer”). The Independent Committee of the
Board of Directors of Atrium has received a fairness opinion letter
as to the financial terms of the Gazit Offer from its financial
adviser UBS AG London Branch and has unanimously recommended the
Gazit Offer.
On 11 September 2019, Atrium announced the
completion of an independent process which was designed by the
Independent Committee of the Board of Directors of Atrium to
determine if there were any third-party bona fide proposals
superior to the Gazit Offer (the “Go-Shop”).
Atrium has since announced that despite engaging with potential
investors during the Go Shop period, no superior proposal was
received. The Independent Committee of the Board of Directors of
Atrium therefore reaffirmed its recommendation of the Gazit Offer
to the minority shareholders.
Recently certain shareholders published that
they do not support the Gazit Offer relating to the Offer Price,
noting that in their opinion the Offer Price undervalues Atrium
which has a reported EPRA Net Asset Value (NAV) per share as of
June 30, 2019 of €5.05, significantly higher than the Gazit Offer.
In addition, these shareholders argued in their public press
releases that Atrium's portfolio of high-quality shopping centers
is predominantly situated in the best locations in Poland and Czech
Republic, including over half of the assets in Warsaw and Prague.
While Gazit's offer implied a capitalization rate of 7.5%, the
yields for prime shopping centers in Warsaw and Prague are less
than 5%. Further, they argue that Atrium's recent sale of two
shopping centers in Poland for approximately €300 million,
represented a premium to book value which supports Atrium's value
and is in direct conflict to Gazit's offer.
On October 25, 2019, Gazit did not obtain the
special majority of 75% out of Atrium's minority shareholders and
hence the offer has been revoked.
Chaim Katzman, Founder and CEO,
commented: "Gazit has been a principal investor in Atrium
for eleven years and has and continues to be a strong supporter of
the Company’s strategy. Gazit will continue to support Atrium and
its strategy going forward for the benefit of all shareholders.
"As part of our strategy to focus on assets
located in high density urban markets and to increase the wholly
owned real estate component in our portfolio, we offered a price
which we believe was an attractive price for minority shareholders
to monetize their investment in Atrium, while carrying out Gazit's
strategy. Naturally, we are disappointed that our offer has not
been accepted, however, we are also simultaneously pleased by the
trust and support of Atrium shareholders in Atrium's value and
management.
"Gazit will continue implementing its strategy
to increase the wholly owned real estate component in its portfolio
through, among other things, acquisitions of prime properties in
major urban markets in Israel and North America as well as through
development and expansion of existing properties in Israel and
North America."
About Gazit GlobeGazit Globe is a leading
global real estate company focused on the ownership, management and
development of retail and mixed use properties in North America,
Israel, Brazil, Northern, Central and Eastern Europe, located in
urban growth markets. Gazit Globe is listed on the Tel Aviv Stock
Exchange (TASE: GZT) and is included in the TA-35 index in Israel.
As of June 30, 2019, Gazit Globe owns and operates 102 properties,
with a gross leasable area of approximately 2.5 million square
meters and a total value of approximately NIS 40 billion.
FOR ADDITIONAL INFORMATIONA comprehensive copy
of the Company’s financial report is available on Gazit Globe
website at www.gazitglobe.com Investors Contact: IR@gazitgroup.com,
Media Contact: PR@gazitgroup.comGazit Globe Headquarters, Tel-Aviv,
Israel, Tel: +972 3 6948000
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