Business Irish

Saturday 20 January 2018

Soros firm backs fresh Kennedy Wilson offer

George Soros of Quantum Strategic Partners
George Soros of Quantum Strategic Partners
John Mulligan

John Mulligan

George Soros's Quantum Strategic Partners has rowed in behind a revised offer by US-based Kennedy Wilson to acquire its sister firm, stock market-listed Kennedy Wilson Europe.

Kennedy Wilson is adding a cash component to what was previously an all-share proposal. It values the London-listed Kennedy Wilson Europe (KWE) at about £1.44bn (€1.63bn).

The takeover involves well over €1bn worth of high-profile property assets in Ireland. Kennedy Wilson owns the Shelbourne Hotel in Dublin, while KWE owns the Portmarnock Hotel and Golf Links.

The revised offer, valued at £11.45 a share, reflects the US firm's Monday share price, but is still less than the original £11.74 offer price, however.

Kennedy Wilson's US shares have fallen in recent weeks, which undermined the value of the original proposal.

Under the proposed new terms, shareholders in KWE will be able to receive either the 0.667 shares in Kennedy Wilson that were originally offered, or alternatively they can accept 0.3854 shares in Kennedy Wilson and also receive £3 cash for each KWE share they own, as well as a £2.50 special dividend per share.

If all KWE shareholders elect to avail of the new offer, KWE shareholders would own about 24pc of the enlarged group.

Kennedy Wilson said that it has received irrevocable undertakings from Quantum Strategic Partners and Franklin Templeton Institutional to vote in favour of the revised scheme. Combined, the firms control 21.8pc of KWE's existing ordinary share capital.

An additional 14pc of KWE shares have been pledged in favour of the deal, with global asset firm Varde Shareholders also backing it.

Canada's Fairfax Financial Holdings, a convertible bond lender to Irish listed insurer FBD, has also indicated that it will back Kennedy Wilson in its move to acquire KWE. So too has Elkhorn Partners. Between them, they own 14.3pc of Kennedy Wilson.

Kennedy Wilson indicated yesterday that the takeover is scheduled to be completed by the end of the year.

In May, Quantum Partners said it was "disappointed" at the initial proposed terms of the takeover of KEW, which will create a $4bn (€3.7bn) global property investment giant.

Colm Lauder, a real estate analyst at Goodbody Stockbrokers, said the revised proposal has a much wider support base than the original offer and a "much higher chance of success".

Other Irish assets owned by KWE include the Stillorgan Shopping Centre in Dublin.

Kennedy Wilson is developing the huge Capital Dock office site in the capital in conjunction with Nama and Fairfax Financial.

The firms has sold one of the still under-construction office blocks in the development to US banking giant JP Morgan.

Kennedy Wilson said last month that the merged group's development portfolio "provides additional upside".

Irish Independent

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