Carlos Slim has upper hand in Spain property fight
14/03/2019 12:27
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Liam Proud
LONDON, March 14 (Reuters Breakingviews) - Hedge fund
Polygon reckons Realia, controlled by the Mexican tycoon, uses
lowball land valuations and raised capital it doesn’t need. The
800 mln euro company’s response is unconvincing. Yet unless
regulators force it to change, Slim could increase his stake at
a lowball price.
Full view will be published shortly.
On Twitter https://twitter.com/liamwardproud
CONTEXT NEWS
- Britain’s Polygon Global Partners on Jan. 14 filed a
public complaint with Spain’s Institute of Accounting and
Auditing against Spanish property group Realia Business, which
is controlled by Mexican tycoon Carlos Slim.
- The hedge fund alleges that Realia is improperly valuing
its residential real estate holdings and has “failed to present
a true and fair view of Realia’s assets as required by
international accounting principles”.
- Realia on Jan. 4 said it had raised 149 million euros in a
December rights issue priced at 0.85 euros per share. It
reported a take-up of 99.6 percent. Realia shares closed at 0.98
euros per share on March 13.
- Polygon controls roughly 10 percent of Realia. Companies
controlled by Slim own just over 70 percent of the company’s
voting rights according to the most recent filing on the
Comision Nacional del Mercado de Valores website. That filing
was dated from before the most recent rights issue.
- Realia and a spokesman for Slim responded to requests for
comment by resending a December shareholder letter from the
Spanish company. In it, Realia pointed out that the ECO
valuation criteria was established by the previous management in
2012.
- The rights issue was necessary, it argued, to repay 120
million euros of short-term debt and start developing land. It
said that when an investor wants to buy a company, they make a
public offer to acquire shares rather than using a capital
increase.
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click on PROUD/
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Realia raises €149m in rights issue with 99.6% take-up - IFR
News urn:newsml:reuters.com:*:nL8N1YQ4H2
Polygon letter https://www.prnewswire.com/news-releases/open-letter-to-the-audit-committee-and-auditors-of-realia-sa-300762562.html
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(Editing by Peter Thal Larsen and Bob Cervi)
((liam.proud@thomsonreuters.com; Reuters Messaging:
liam.ward-proud.thomsonreuters.com@reuters.net))