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Dubai bid for troubled Spanish real estate company fails

The Investment Corporation of Dubai has pulled out of €3 billion offer for Inmobiliaria Colonial, in what would have been the sovereign wealth fund’s first major move into overseas markets.

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

The Investment Corporation of Dubai (ICD) last week made a conditional cash-plus-bond offer to the company in which the Dubai fund would have bought a 50.1 percent stake before bidding for the whole organization.

However according to a report by Reuters, ICD said in a statement today they had been unable to reach agreement with Colonial shareholders by the deadline of March 3.

In an offer letter to Colonial, the Dubai fund said it would have paid €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.

ICD, which was established in 2006 to manage investments of the Dubai Government’s finance department including Emaar Properties and the Dubai World Trade Centre, was reported to have failed to reach agreement after pushing for a discount, or improved conditions, on a syndicated loan. The offer depended on reaching a deal with Colonial’s creditors, Goldman Sachs, Royal Bank of Scotland, Eurohypo and Calyon, the report said.

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.