Dubai withdraws Colonial offer

ICD said it has withdrawn its bid for Inmobiliaria Colonial leaving the indebted firm with potential refinancing problems.

The Dubai group broke the news via a filing with the Spanish stock market regulator.

Apparently the investment group, owned by the Dubai government, was unable to reach an agreement with the property group’s leading shareholders. According to media reports Luis Portillo, Zent Inversiones and Nozar, which own 50% of the firm between them, were looking to improve the terms of the offer.

ICD was offering €2.98bn (US$4.53bn) for Colonial in a combination of cash and bonds. At that price the leading shareholders would have been left with a significant loss.

At the Monday Mar 3 close, the shares were €1.23 each, representing a near 75% fall on what they were trading at a year ago.

However, Colonial managed to post a fivefold net profit increase in 2007 of €85.4m, thanks to acquisitions, which left it heavily in debt. As of December 31, Colonial’s debt was €8.96bn, representing 67.2% of the value of its assets. According to Colonial its net asset value per share is €2.35.