Kuwaiti stake in Green Reit raises eyebrows

Cantillon: Could sovereign wealth fund be making a play for the Dublin-listed company?

Green Reit is understood to have received indicative proposals ahead of a deadline last Wednesday for first-round bids. Photograph: Cyril Byrne

Green Reit is understood to have received indicative proposals ahead of a deadline last Wednesday for first-round bids. Photograph: Cyril Byrne

 

The usual flurry of Monday morning stock exchange announcements contained a notification that piqued the interest of followers of the Green Reit sale.

Kuwait Investment Authority revealed that it holds a 3.27 per cent stake in the property group, prompting some speculation that the world’s oldest sovereign wealth fund may be among companies making a play for the Dublin-listed commercial property company – and seeking to gain an edge.

The 66-year-old fund says on its own website that it “does not seek to purchase majority or controlling interests in companies in which it invests, other than shares in real-estate investment entities and investment holding companies that it establishes for particular transactions”.

However, closer inspection of the stock exchange filing showed that the Kuwaiti fund actually breached the 3 per cent threshold last October.

The investment comes from the combination of three funds in which the Kuwaitis are invested: run by Threadneedle Asset Management, Axa Investment Managers, Dekabank Deutsche Girozentrale. The aggregate holding by the sovereign wealth fund may only have emerged internally recently.

Green Reit is understood to have received a number of indicative proposals ahead of a deadline last Wednesday for first-round bids, with Canadian-owned Irish Life and Californian real-estate group Kennedy Wilson among parties known to have been working on offers. The process has also attracted strong interest from European pension funds as well as Asian and North American money.

Surged

The stock market value of Green Reit has surged by 14 per cent to €1.22 billion since it put itself up for sale in April, attracting the interest of a number of hedge funds that are keen to make money out of a trade.

The market has certainly priced in a sale going ahead. The shares, which were trading at more than a 16 per cent discount to Green Reit’s net asset value (NAV) before the for-sale sign was hoisted, are currently changing hands at about a 4 per cent gap, at €1.75 a piece.

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