The proposed tie-up of F&C asset management’s property business in UK and Ireland with Reit will create F&C Reit, a UK-owned property asset manager with £8.5 billion assets under management.
F&C will pay owners of Reit consideration of £25 million cash and £35 million loan notes for a 70 per cent majority ownership interest in the company. Reit will hold the remaining 30 per cent stake and this could rise by 10 per cent by the end of 2014 if the combined business meets EBITDA performance targets.
Reit manages an international property portfolio valued in excess of £3.5 billion which focuses on commercial property investments in the UK and Europe. Reit comprises Reit Asset Management, owned by Leo Noé and Ivor Smith, and Reit Worldwide, which is owned by discretionary trusts established for the pair’s families.
Noé will be executive chairman, Smith will be executive member and Nick Criticos will be chief executive of the combined business.
The transaction is conditional on the approval of F&C’s shareholders but Friends Provident and Eureko have irrevocably agreed to vote in favour of the deal.
F&C chief executive Alain Grisay says: “This transaction is consistent with the development of our multi-specialist business model and the strategic direction of our three year plan. It will increase our geographic scope, widen our product range and deepen our expertise in property asset management which is a core long term asset class for our clients. The combination should be significantly value enhancing for our shareholders.”