Managers to stay in merger
Co-CEOs to lead Nepi Rockcastle
New Europe Property Investments and Rockcastle Global Real Estate are set to retain their executive management teams when they merge into the largest property fund on the JSE.
New Europe Property Investments (Nepi) and Rockcastle Global Real Estate are set to retain their executive management teams when they merge into the largest property fund on the JSE.
Analysts have lauded the decision to hold onto the two companies’ core management, with the Nepi Rockcastle entity set to be an extremely sizeable group that operates across Eastern Europe. The two companies released details about their merger through an abridged prospectus on Friday.
Alexandru Morar, CEO of Nepi, and Spiro Noussis, CEO of Rockcastle, will be co-CEOs of the combined company, which is forecast to be worth R89bn.
Nick Matulovich, the financial director of Rockcastle, will become an executive director of the merged entity. Mirela Covasa, Nepi’s chief financial officer, will become the chief financial officer of Nepi Rockcastle.
The new group will be the largest property company in Eastern Europe and a member of the Euronext 100, which includes the largest, most liquid groups on the Euronext stock exchange.
Nepi Rockcastle’s issued ordinary shares will be listed on Euronext Amsterdam concurrently with the JSE listing or as soon as possible afterwards. Nepi Rockcastle will have a dual primary listing on the JSE and Euronext Amsterdam.
Nepi and Rockcastle are both part of the Resilient group and have focused on owning dominant shopping centres in cities in Romania and Poland.
Morar said the new entity would be able to pursue deals worth from €70m to €200m and possibly above that.
Ron Klipin, portfolio manager at Cratos Wealth, said Nepi Rockcastle would mean cost savings and greater liquidity. It would attract tracker funds, which should bolster the combined share price.
“It’s important that they are retaining their core management and that they have a focus on owning property directly in growing Eastern Europe,” Klipin said.
In terms of the merger, Nepi shareholders have the opportunity to sell their shares to Nepi in consideration for which Nepi would transfer Nepi Rockcastle shares based on the swap ratio of one Nepi share for every 4.7 Rockcastle shares. Shareholders would also receive one Nepi Rockcastle share for every one Nepi share repurchased.
The head of listed property funds at Stanlib, Keillen Ndlovu, said: “We support the deal. We believe that it makes sense, more so after they recently adjusted the price to make it more attractive.”