July 25 (Bloomberg) -- Inmobiliaria Colonial SA, Spain’s largest publicly traded real estate company, said it made a “tentative” bid of 650 million euros ($874 million) for the property unit of smaller competitor Realia Business SA as the country’s real estate market recovers from a six-year slump.
Colonial’s offer for Realia Patrimonio is subject to conditions including the sale of non-strategic assets, obtaining financing and completing due diligence, the Barcelona-based company said in a regulatory filing today. Madrid-based Realia, which gained the most in a month, has a market value of about 418 million euros.
The offer is part of Colonial’s continuous process of analyzing business opportunities, the company said. Realia, like other Spanish property companies, had been hurt by the country’s worst recession in six decades. It’s reported cumulative losses of about 370 million euros in the past two years.
Realia Patrimonio holds 30 leased offices in Madrid and eight shopping malls in Spain, according to Realia’s website. Realia Business has a separate unit called Realia Promociones which develops residential properties in Madrid, Seville and the Canary Islands, according to the website.
The Bankia Group owns 25 percent of Realia Business and Fomento de de Construcciones & Contratas SA has about 37 percent. Both shareholders are seeking to sell their stakes in order to raise capital.
Bankia, the Spanish bank whose losses forced the government to seek a European bailout, and FCC, the construction company controlled by Spanish billionaire Esther Koplowitz, are being advised by Goldman Sachs Group Inc.
Realia gained as much as 8.9 percent in Madrid, the most since June 26. The shares were up 5.8 percent at 1.37 euros at 11:15 a.m.
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