Wereldhave to Sell U.S. Portfolio to Lone Star for $720MDalia Fahmy
Wereldhave NV, the Dutch property company that cut dividend targets amid losses last year, agreed to sell all of its U.S. real estate to Lone Star Funds for about $720 million.
Net proceeds from the deal are about 5 percent more than the book value of the U.S. buildings, Wereldhave, based in The Hague, said in a statement today. The company will use the money to reduce its debt.
The U.S. exit comes as Wereldhave takes steps to improve its performance after a drop in first-half profit was followed by the resignation of Chief Executive Officer Hans Pars and the dismissal of the company’s U.K. and U.S. directors. Changes announced in August included reducing the company’s development portfolio, halting acquisitions and lowering the company’s loan-to-value ratio.
Lone Star, a private-equity firm with more than $33 billion in assets, buys distressed properties to restructure them and then sell them at a profit. Last month, Lone Star agreed to buy commercial properties from the German government valued at about 1.1 billion euros ($1.4 billion) including debt.
The transaction announced today is due to close in the first quarter, Wereldhave said. The deal will trigger the release of a provision for deferred tax, according to the statement.
Wereldhave gained as much as 4.88 percent in Amsterdam trading, the most since July 20. The stock was up 2.8 percent at 50.30 euros as of 12:04 p.m.
The company in February said it planned to focus on shopping centers in the Netherlands, Belgium, Finland and the U.K. as well as offices in Paris and Madrid. Wereldhave said at the time that it lacked scale in the U.S., where it held about 800 million euros of assets.
The shares fell the most since 1989 in July after the company said Pars quit and was replaced by Chief Financial Officer Dirk Anbeek. Direct result, rental income minus expenses, dropped 17.5 percent in the first half.
The company lowered the dividend targets for 2012 to 3.20 euros to 3.40 euros per share, giving up on a goal of keeping shareholders’ payouts unchanged at 4.70 euros. The company targets earnings per share of at least 3.8 euros for 2012, according to its third-quarter earnings report released in November.