Colonial Gains After Villar Mir Buys Stake in Spanish Developer

Inmobiliaria Colonial SA, the Barcelona-based property developer, rose to the highest price in six weeks in Madrid trading after Grupo Villar Mir said it bought a 19.3 percent stake.

The shares rose as much as 9.4 percent. Villar Mir paid Royal Bank of Scotland Group Plc about 44 million euros ($60 million), or 1 euro a share, for the stake, it said in statement after the market closed yesterday. That’s 14.5 percent less than yesterday’s closing price.

Colonial is due to ask shareholders to approve a 1 billion-euro capital increase at a meeting next week. The company has plans to raise as much as 500 million euros more by converting loans, though that won’t take place if the capital increase is fully subscribed.

Colonial received commitments totaling 500 million euros for the capital increase from investors including Villar Mir and Grupo Santo Domingo, the company said on Jan. 2. Villar Mir proposed investing 300 million euros through a capital increase, while Grupo Santo Domingo and Amura Capital each agreed to invest 100 million euros, Colonial said.

The commitments are subject to conditions including the refinancing a syndicated loan that currently stands at 1.76 billion euros. The maximum price of the capital increase was set at 50 cents a share with a commitment to not sell more than 20 percent of Colonial’s stake in French real estate investment trust Societe Fonciere Lyonnaise, the company said.

Colonial was up 7.4 percent at 1.26 euros at 11:00 a.m., its highest level since Dec. 3, giving the company a market value of 284 million euros.

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