Globalworth Real Estate Investments board reject offer from its largest shareholders

On 26 April 2021, Globalworth Real Estate Investments Limited (Globalworth) rejected an offer by a consortium of its largest shareholders, CPI Property Group S.A. and Aroundtown SA (together holding approximately 51.5% share capital) to acquire the entire issued and to be issued share capital of the company at £6.08 per share.

The offer, announced on 14 April 2021, values Globalworth at approximately £1.37bn and represents a 19.5% premium to Globalworth’s share price one day prior to the announcement. Globalworth’s share price jumped by 22.8% at the close of business on the day of the announcement, representing an optimistic turn given the company’s struggle to recover to its pre-pandemic trading levels.  

Globalworth announced that it had established an independent board committee to evaluate the offer made by the consortium on 19 April 2021. The committee concluded that the offer significantly undervalues Globalworth and its prospects, with the offer representing a significant discount to Globalworth’s EPRA net asset value (which was £7.80 per share as of 31 December 2020) and a more than 27% reduction to the company’s  pre-pandemic 6-month volume weight average share price as of 21 February 2020. The committee also noted that the consortium has not sought a recommendation for the offer. Accordingly, the committee have recommended that shareholders take no action in relation to the offer and noted that it will provide its shareholders with a formal response following publication of the offer document by the consortium.

On 28 April 2021, Globalworth noted the announcements made by its shareholders Growthpoint Properties Limited, The European Bank for Reconstruction and Development and Oak Hill Advisors, which agreed with the committee’s assessment that the offer undervalues the company. Together these shareholders hold 39.8% of the entire issued share capital of the company and represent 82% of the shareholders to whom the offer would be made.

Both Aroundtown and CPI are Frankfurt-listed real estate companies, Aroundtown has a focus on properties in Germany and the Netherlands, whilst CPI is focused on Central and Eastern Europe. The consortium intends to increase investment in existing assets and expand Globalworth’s portfolio to enhance its positioning as a leading Central and Eastern European real estate owner and operator.

David Greenbaum, Chief Financial Officer of CPI, said the following of the offer:

"CPI and Aroundtown are both highly experienced, strong and stable owners of European real estate. Working together as partners will allow us to maximize long-term value while maintaining Globalworth's strong investment grade capital structure and excellent teams in Romania and Poland.”

Market Tracker will continue to monitor this transaction as it develops.