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Grupo San Jose, the unlisted Spanish property company, has no intention of buying out minority shareholders in its 66% listed affiliate Parquesol, a source told dealReporter. The source, who has knowledge of the situation, said that instead of buying up shares in the market, San Jose will instead merge with its property company, and added that talks are at a ”very advanced” stage.
According to the source, the internal restructuring runs parallel with San Jose’s debt renegotiation talks. The source said that San Jose has maintained much more “conservative” debt ratios than some of its peers in Spain, adding that the debt talks are of a routine nature, with little risk of failure.
A spokesperson for San Jose said that the company still plans to merge with its listed entity this year, adding that the merged entity would take the name of the parent company.
At the end of 2006, San Jose group launched an offer for EUR 23.1 per share in listed property company Parquesol, with irrevocable agreements to buy out the majority shareholder. Shareholders tendered just under 51% of the shares to the offer and the group also owns a further 15%. Parquesol shares are now trading at EUR 8 following the collapse of the Spanish property sector.
Other shareholders in Parquesol include unlisted savings bank Caja Castilla-La Mancha, with a stake of 13%. Caja de Ahorros Municipal de Burgos owns a further 5%.
The bidder said in its offer document that its objective was to take control of Parquesol to further the diversification of its business model. San Jose also said that it planned to study an internal merger, among other options, while keeping its affiliate’s stock market listing intact.
At the end of 2007, San Jose invited property group Labaro to join a three-way merger with Parquesol. This deal fell apart earlier this year when Labaro filed for administration, as reported.
In a fairness opinion released in May, KPMG said that the project to merge Parquesol into San Jose’s group structure was based on a fair exchange ratio.
San Jose recently named Miguel Zorita (formerly of Deloitte) as its new chief executive to oversee the merger and the transition into a public company.
Grupo San Jose, which was founded in 1975, is controlled by chairman, former chief executive and majority shareholder, Jacinto Rey. He is a former mathematics teacher turned property mogul, who avoids the limelight as far as possible.
The group includes construction, property, industrial and services businesses. One of its assets is a stake in a joint venture to extend Madrid’s main thoroughfare, el Paseo de la Castellana, as soon as a number of lawsuits have been resolved.
At the head of the San Jose group is a company called Udra, which disclosed debt of EUR 916m on operating income of EUR 1.25bn in 2005. Recent press reports have estimated the group’s total debt at EUR 1.2bn.
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