Unibail-Rodamco announces an agreement to sell to CPPIB a 46.1% stake in mfi AG. CPPIB will pay the Group €394 Mn for the equity stake and will also provide additional funding in support of mfi's financing strategies.
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The price reflects an implied net initial yield of 5.1% for mfi's portfolio and an average price of €5,000/square meters. In June 2012, Unibail-Rodamco acquired from Perella Weinberg Real Estate Fund I, 51% of shares of a company which, at the time, owned 90.4% of mfi AG.
On February 13, 2014, Unibail-Rodamco entered into a partnership with CPPIB on CentrO, one of Germany's largest and most successful shopping centres located in Oberhausen. Following transactions on July 2, 2014, and April 30, 2015, Unibail-Rodamco's stake in mfi currently amounts to 94.15%. The Group and CPPIB have worked together since the closing of the CentrO acquisition on May 14, 2014.
By strengthening its partnership with CPPIB in Germany, Unibail-Rodamco creates a unique opportunity to align the interests between CentrO and mfi. This transaction will bring most of the parties' shopping centres in Germany under one umbrella.
The new joint-venture will capitalize on Unibail-Rodamco's best in class operating management skills and CPPIB's extensive real estate investment experience and access to global best practices. CPPIB will appoint two representatives to the Supervisory Board of mfi.
Pursuant to the joint-venture agreements, Unibail-Rodamco's stake in mfi will amount to 48.0% and mfi will remain fully consolidated. The impact of the proposed transaction was anticipated and is included in the 2015 full year recurring earnings per share guidance provided in January 2015.
The closing of the purchase and sale agreement is subject to customary conditions precedent, including regulatory approvals, and is expected to close in Q3 2015. ■