Kennedy Wilson Europe to merge with Kennedy Wilson Holdings

Kennedy Wilson Europe (KWE), the London-listed property company that owns the Stillorgan shopping centre and a number of offices and apartment developments in Dublin, is to merge with its parent company, Kennedy Wilson Holdings (KW).

The all-share merger, at 1,174p per share, a premium of about 20 per cent on the latest closing price, will see the Californian-based KW, which previously held a 23.7 per cent stake in KWE, take full ownership of the European entity. The move creates a group with a property portfolio of over 400 properties diversified across the US, UK, Ireland, Italy, Spain, and Japan, with an enterprise value of about $8.4 billion (€7.74 billion) and a market capitalisation of about $4 billion.

Significant milestone

William J McMorrow, chairman and chief executive of KW, said: “This transaction represents one of the most significant milestones in our 40-year history. The combination will create a leading global real estate investment and asset management platform with enhanced diversification supported by the continuity of leadership with a strong, proven track record. The enterprise will benefit from greater scale and improved liquidity, which will enhance our ability to generate attractive risk-adjusted returns for our shareholders.”

Philip O’Sullivan, economist with Investec, said that the tie-up “looks like a very sensible deal that will deliver scale and synergy benefits”.

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Back in March, Merrion Capital speculated that KWE was ripe for a takeover bid within the next 12 months, citing a strong probability that it would eventually be taken over by its American-listed parent counterpart.