Disclosure announcement transmitted by euro adhoc. The issuer is responsible
for the content of this announcement.
St. Helier, Jersey, 20 March 2008. In September 2007, the Board of
Directors of Meinl European Land Limited ("MEL" or the "Company"),
the central and eastern European focused property owner and
developer, began the process of a strategic review, the purpose of
which was to identify and implement improvements to the Company´s
management, corporate governance and reporting arrangements and
processes, as well as a review of the Company´s capital structure and
As a result of this process, which involved the examination of third
party proposals and other alternatives, MEL and CPI/Gazit Holdings
Limited ("CPI/Gazit"), a joint venture between Gazit-Globe Ltd
("Gazit"), a multinational real estate investment company listed on
the Tel Aviv Stock Exchange (TASE:GLOB), and CPI Capital Partners
Europe LP (and its parallel funds), a real estate fund advised by
Citi Property Investors, a business unit of Citibank International
plc ("CPI") today announce that they have signed an agreement by
which CPI/Gazit will make a strategic investment of up to EUR800
million in the Company. In addition, a transformation of MEL´s
governance and management structure will take place.
The Company has been engaged in discussions with strategic investors
since the beginning of 2007. The signed agreement with CPI/Gazit
entails a significant restructuring and repositioning of the Company
enabling it to internalise management, to adopt international best
practice corporate governance arrangements, and focus on building out
its development pipeline. In the face of market illiquidity and
increased volatility in international debt and equity markets, the
funding flexibility and strengthened balance sheet provided by this
cash infusion will allow the Company to pursue growth opportunities
that would not otherwise be available.
Highlights of the transaction are as follows:
@@start.t2@@- EUR800 million of underwritten new investment in MEL comprising a
subscription for EUR500 million of convertible securities and in connection with
a capital increase a EUR300 million rights issue to MEL certificate holders,
which will be underwritten by CPI/Gazit.
- The management of MEL will be internalised through the termination of
the Meinl European Real Estate ("MERE") management contract (with a one year
orderly handover) and the recruitment of a new executive team. All other
contractual and operational ties with Meinl Bank and its affiliates will be
severed. The internalisation of the Company´s management will align
MEL-investor and management interests.
- Gazit and CPI will receive board representation and the board will be
reconstituted with a majority of independent directors. The board will comprise
a number of well respected international real estate experts and be chaired by
Chaim Katzman, the current chairman of Gazit-Globe.
- Simplification of MEL´s ownership structure - upon closing, all partly
paid shares in the Company and the shares underlying the repurchased
certificates will be cancelled.@@end@@
- CPI/Gazit´s commitment to make its cash injection is not
subject to any financing contingency. It will be funded from both
parties´ internal cash resources and committed lines of credit of
Gazit and funds of CPI Capital Partners Europe LP.
- The transaction is subject to regulatory and MEL-investor
approval and receipt of MEL´s 2007 audited financial statements, as
well as other customary conditions.
@@start.t3@@- This strategic partnership will allow the Company and its certificate
holders to benefit from Gazit´s and CPI´s financial and operating strength and
public market corporate expertise. Gazit has 20 years´ experience of developing,
owning and managing shopping centres across the world.
- In line with industry best practice and to reflect the value placed on
the MEL's operational management and employees, a reward package will be put in
place to incentivise staff and ensure that project profitability is the key
driver of all efforts.
- The Company will endeavour to regain its investment grade rating as soon
Commenting on the deal, Georg Kucian, Chairman of MEL, said: "The
proposed transaction represents a very positive outcome for
certificate holders. The introduction of new capital will enable MEL
to accelerate its expansion in Eastern Europe, while the adoption of
strong corporate governance measures and management restructuring
will help regenerate confidence in the Company. We are pleased to
have Gazit and CPI as investors in MEL and believe they will be able
to make a material contribution to the continuing development of the
Commenting on the deal, Chaim Katzman, chairman of Gazit-Globe Ltd,
said: "We believe MEL has enormous potential to deliver investor
value, which the Company has been unable to capitalise upon. It has
a portfolio of 160 high quality assets diversified across 11
countries, offering considerable mid to long term growth potential,
particularly in the rationalisation, value maximisation and
completion of the Company´s development pipeline. The capital
injection we are proposing with CPI offers certificate holders an
opportunity to benefit from that potential and this deal allows the
Company to take control of its management base which will serve to
enhance the portfolio. It means we can start working towards a
brighter future for the benefit of all investors.
"Our initial priorities are to create predictable and sustainable
cash flows from the underlying assets, as well as setting out a
steady growth profile through accretive developments and
acquisitions. We are also committed to establishing a strong and
transparent relationship with the investment community and to
incentivising and rewarding our most valuable asset - our staff.
"CPI is Citi´s global real estate investment platform and as our
partner, will enhance financial rigour and bring reputational
integrity to the governance of the Company. We embrace CPI´s
operational contribution given its specialist knowledge and
experience in investing in real estate and entity level platforms in
mature and emerging markets."
Roger Orf, head of CPI Europe added: "The transaction we are
proposing will allow Meinl European Land to focus on the existing
portfolio and future development of its land bank. The capital
injection will have an extremely positive effect on the Company´s
balance sheet and, ultimately, the credit rating. It provides the
Company with the ability to self finance and will improve the terms
on which it can source external finance in these difficult times, all
of which will help re-establish its position as a leading property
owner in Central and Eastern Europe.
"We believe that Gazit brings to the transaction an outstanding team
of highly qualified and experienced professionals who understand how
to manage and develop retail assets around the world and importantly
have significant experience in managing listed vehicles to the
highest fiduciary standards. We look forward to a long and
productive relationship with Chaim and his team and the various MEL
Financial details of the transaction
The EUR800 million underwritten investment will comprise the
@@start.t4@@- The Company will issue EUR500 million Subordinated Convertible Debt
Securities (the "Convertible Securities") to CPI/Gazit with the following
- Maturity of seven years
- Annual cash coupon of 10.75%
- At the option of CPI/Gazit, the Convertible Securities are convertible
into MEL certificates at a price of EUR9.00 per certificate. These are subject
to standard anti-dilution provisions
- MEL can force conversion at any time following 36 months after their
issue date if MEL certificates trade for 60 consecutive days at a price that is
greater than 135% of the conversion price
- CPI/Gazit can force MEL to redeem the Convertible Securities at any time
after the later of the date of completion of MEL´s medium term note programme
and the five year anniversary of the date of issue of the Convertible
- CPI/Gazit will in connection with a capital increase underwrite a EUR300
million rights issue of newly issued MEL certificates according to the following
- The holder of every 29.57 MEL certificates will be eligible to subscribe
for six newly issued MEL certificates at an issuance price of EUR7 per
certificate and two warrants for every six certificates for no additional
- CPI/Gazit has the option to subscribe for up to EUR200 million of
additional certificates at a price of EUR7, and one additional warrant for every
6 optional certificates for no additional consideration. The EUR200 million
option is reduced by the value of any certificates taken up under the rights
issue pursuant to the underwriting obligation. This option will expire six
months following completion of the rights issue.
- CPI/Gazit will fully underwrite the EUR300 million rights issue
- CPI/Gazit will receive 30 million warrants.
- All warrants have an exercise price of EUR7 and will expire four years
following closing of the Transaction.
- The rights issue will be conducted within six months following the
approval of the transaction by MEL certificate holders.
Details relating to the termination of the contracts with MERE and MB@@end@@
MERE and MB affiliates have various contracts with MEL, terminable on
notice periods of up to six years.
To terminate these contracts, and for MERE and MB to enter into a
three year non-compete and to procure 12 months of transitional
consultancy services, MEL will pay a total consideration of EUR280
million, of which EUR160 million will be in cash, EUR80 million in
convertible securities and EUR40 million in MEL certificates. As part
of this agreement MB is required to vote in proxy with CPI/Gazit.
The convertible securities and MEL certificates will be issued at the
same price and upon the same terms and conditions as the rights issue
and convertible securities but they will not be entitled to any
warrants. A portion of this amount is subject to a staggered three
year lock-up to ensure that there is an orderly management transition
and thereby assist in providing the best platform for the future
growth of the Company. Some of the securities will be subject to
restrictions on transfer or disposal.
Following completion of the transaction, MEL will adopt a new name
that has yet to be selected.
Improvement in governance
Upon Closing, the existing Directors of MEL will resign and a new
Board of Directors will be appointed to include a majority of
Independent Directors as defined under New York Stock Exchange rules
and to continue to comply with Jersey regulatory requirements.
The new Board of Directors will consist of eight directors. Subject
to certain minimum total investment conditions, CPI/Gazit will have
the right to name up to four members, including the chairman.
The Company is pleased to announce that a number of world class real
estate experts have already agreed to join the board of directors
upon closing. These include Professor Peter Linneman, the principal
of Linneman Associates; Albert Sussman Professor of Real Estate,
Finance, and Public Policy at the Wharton School of Business,
University of Pennsylvania; and Thom Wernink, Chairman of Citycon and
a non-executive director of a number of Continental European-based
property and investment companies including Segro plc and a former
chairman of EPRA.
The appointment of a full time chief executive officer, chief
financial officer and head of acquisitions will be announced in due
course, once the transaction has closed.
Conditions to closing and timetable
The transaction is subject to a number of conditions including:
@@start.t5@@- The obtaining of certain MEL-investor approvals
- Receipt of MEL´s 2007 financial year audited financial statements
- Compliance with certain minimum balance sheet covenants
- No event occurring which would cause a material adverse effect for MEL
- Cancellation of MEL´s partly paid shares and certificates controlled by
- Certain other conditions that are standard for a transaction of this
MEL is committed to consummating a transaction as expeditiously as
possible and believes that the transaction can be closed in the
second quarter of 2008.
An explanatory circular will be sent to certificate holders as soon
as practicable in connection with the shareholders´ meeting.
MEL, MERE and MB have entered into customary exclusivity arrangements
Citi and Deutsche Bank acted as joint advisor for CPI/Gazit; the
Company was advised by Merrill Lynch. Skadden, Arps, Slate, Meagher &
Flom (UK) LLP were legal counsel to CPI/Gazit; Linklaters LLP was
legal counsel of CPI and Freshfields Bruckhaus Deringer acted as
legal counsel to the Company. Meinl Bank was advised by Lazard.
Notes to editors:
About Gazit-Globe Ltd Gazit is a leading multinational real estate
investment company with in excess of EUR8 billion of properties under
control in the United States, Canada, Europe, Israel and Brazil.
Gazit and its public subsidiaries are corporate governance leaders in
their markets and are governed by world class Boards of Directors.
Gazit actively pursues growth opportunities, both organically and
through strategic and accretive acquisitions.
About Citi Property Investors CPI is a global real estate investment
manager with offices in major financial centers and with more than
$12.9 billion in assets under management as of February 1, 2008. CPI
employs more than 125 real estate professionals and its senior
leaders have an average of more than 20 years of commercial real
estate experience. CPI is the real estate investment center of Citi
Alternative Investments which as of December 31, 2007 had EUR59.2
billion of un-levered assets under management.
About Meinl European Land MEL is a real estate investment and
development company whose primary focus is on retail assets in
central and eastern Europe. At 30 September 2007 it had 160 operating
investment properties with a market value of approximately EUR1.8
billion and 34 committed development projects with an expected
investment value of EUR3.4 billion. In addition, it has established a
land bank of over 1.5 million sqm. The Company has been listed on
the Vienna Stock Exchange since 2002and is currently capitalised at
@@start.t6@@end of announcement euro adhoc
ots Originaltext: Meinl European Land Limited
Im Internet recherchierbar: http://www.presseportal.ch
Further inquiry note:
On behalf of Meinl Europe Land:
Citigate Dewe Rogerson
+44 (0)20 7638 9571
Citigate Dewe Rogerson
Alexander H. Engelhardt
+49 (0)69 90 500 200
On behalf of Gazit-Globe Ltd and Citi Property Investors:
+44 (0)20 7831 3113
Dr. Viktor Bauer PR GmbH Dr Viktor Bauer
Mag. Anita Köninger
+43 (0)1 320 95 45 17
AB Financial Dynamics
+49 (0)69 920 37133
Branche: Real Estate
Börsen: Wiener Börse AG / official market