Friday 15 December 2017

Kennedy Wilson agrees €600m deal to exit Spanish joint venture

Santander, chaired by Ana Botin, has agreed to buy US property investor’s stake in a unit of Spain’s Banco Popular. Photo: Bloomberg
Santander, chaired by Ana Botin, has agreed to buy US property investor’s stake in a unit of Spain’s Banco Popular. Photo: Bloomberg
Donal O'Donovan

Donal O'Donovan

US property investor Kennedy Wilson is exiting a Spanish joint venture in a deal triggered by the collapse of Banco Popular.

Kennedy Wilson, a prolific investor here since the crash, entered a joint venture with Varde Partners to take a 51pc stake in Aliseda, Banco Popular's loan servicing company at the end of 2013, in an early push into the market there.

However, Spanish banking giant Santandar, which bought Popular's good assets in a rescue deal last month, including its 49pc of Aliseda, agreed to buy back the Kennedy Wilson-Varde shareholding so it can include the debt manager in a much bigger sale of Popular assets.

Popular's new owners have approved the sale of 51pc of Aliseda for an enterprise value in excess of €600m.

"Aliseda represents KW's first deal in Spain and has allowed the Joint Venture to leverage its management platform and crystallise strong profits and return on capital," said Mary Ricks, President and CEO of Kennedy Wilson Europe.

"We have successfully delivered strategic asset repositioning to Aliseda, which has also benefited from continued positive economic momentum alongside good institutional demand across Spanish real estate."

Kennedy Wilson is itself in the midst of a deal to connect its US and European arms, by taking London-listed Kennedy Wilson Europe (KWE) private in a deal valued at about £1.44bn (€1.63bn)

After initial resistance, KWE shareholder George Soros's Quantum Strategic Partners has rowed in behind the plan.

The KWE 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, along with a slew of high end offices and retail assets.

US-based Kennedy Wilson itself said it is due to report financial results for the year on August 3, when its European plans are likely to be a focus.

Meanwhile, Santander is reportedly seeking around €5bn for a majority stake in the €30bn of proporty loans and other assets it took over when it bought Banco Popular in June, according to three people with knowledge of the matter.

Blackstone, Apollo and Lone Star are reportedly all shortlisted to bid for a 51pc share of the assets being sold by the last week of July.

All were big buyers of Irish distressed loans after the crash.

Santander will retain an interest in 49pc of the assets and will form a joint venture with the winning bidderr to manage the holdings.

Aliseda, which manages much of the portfolio already will be solit between Santander and the winning bidder.

Irish Independent

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