Santander awaits bids for a 51% stake in assets of Popular
Banco Santander is asking about €5bn for a majority stake in €30bn of real estate loans and assets it inherited when it bought Banco Popular Espanol SA, according to three people with knowledge of the matter.
Santander has short-listed Blackstone Group, Apollo Global Management and Lone Star Funds to submit bids for 51% of the assets by the last week of July, the people said, asking not to be identified because the information was private. The bank would keep the remainder and form a joint venture to manage the holdings with the winning bidder, the people said.
The successful bidder would also acquire a 51% stake in Aliseda, the former property management company of Popular that Santander bought from Varde Partners and Kennedy Wilson Holdings last week, the people said.
REAL ESTATE RECOVERY
Santander chairman Ana Botin has said her plan to turn around Popular included selling at least half of its real estate assets in the next 18 months. Popular’s troubles reached a crisis point in June as the scale of its real estate losses scared away would-be buyers and its plunging share price made raising capital impossible.
“It’s too early to tell whether the bank is asking too much or too little as we don’t yet know which particular assets are going to be rolled into the stake that is being sold,” said Fernando Rodriguez de Acuna Martinez, general director of Madridbased real-estate consultancy RR de Acuna & Asociados. “Popular has a lot of everything and there is a big difference in values between, say, land, offices and nonperforming loans.”
Rents in Madrid rose 13% in the first quarter compared with a year earlier and are now the highest since 2011, according to broker Savills. Yields are stable, with wider commercial property investment deals in the city more than doubling in the period to €826m.