Blackstone signs deal to buy Sponda of Finland
Blackstone, the US buyout group, has agreed to buy Sponda, a Finnish real estate company, for roughly EUR1.8bn in cash as it looks to expand its presence in the Nordic region. Sponda shareholders will be offered EUR5.19 per share in cash, which represents a premium of 20.7 per cent to Sponda’s last closing share price on Friday, Blackstone said on Monday. The Finnish company’s board has decided unanimously to recommend the offer to its shareholders.
The price would give Sponda, which has assets in office and residential real estate, retail and logistics, an enterprise value of EUR3.8bn. Sponda’s shares surged more than 20 per cent following the announcement, which would see Blackstone eventually owning 100 per cent of the company. “Our proposed acquisition represents another step in Blackstone’s longstanding strategy of investing in high-quality real estate assets and businesses across the Nordic region,” said James Seppala, head of European real estate acquisitions at Blackstone.
The deal comes days after Blackstone sold Logicor, a pan-European logistics company, to China Investment Corporation for EUR12.5bn. Since 2015, Blackstone has acquired control of more than EUR4bn of properties in the Nordic region including EUR1bn of assets located in Finland. “The acquisition of Sponda represents a unique opportunity for Blackstone to increase its investment in the Nordic region and Finland, in line with its strategy to acquire and grow high-quality platforms globally,” the private equity group said.
Industry experts had called for the company to be sold or liquidated because the value of its portfolio was materially higher than Sponda’s share price.
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“Sponda’s share has been persistently below the value of its portfolio because its management team is not highly regarded,” said Peter Papadakos, an analyst with Green Street Advisors in London. He said the deal represented good value for Blackstone. “They are paying about a euro less [per share] than what we think the enterprise value is.
“It could be a good deal for them, especially if they have investors lined up to spin off some of the assets.” Blackstone is set to dispose of the company’s assets in Russia, a person familiar with the strategy said. Mr Papadakos said the buyout group could also dispose of Sponda’s logistics and retail assets — including a flagship shopping centre in Helsinki.
By doing so, he argued, Blackstone could run business focused on office properties in the heart of the Finnish capital and develop land Sponda owns into office buildings.
Sponda, which was founded by the Bank of Finland during the country’s banking crisis in 1991, had leasable area of about 1.2m square metres as of the end of March.
Blackstone declined to comment on its future plans with the company.