MSREF Sells Lucette Control to Icade

PARIS-French SIIC/REIT Icade and its counterpart Compagnie la Lucette are to merge. Morgan Stanley Real Estate Fund V, which controls Lucette, last month reached agreement with Icade for the latter to acquire MSREF’s 94.5% stake in exchange for 4.5% of Icade total equity. The deal makes MSREF the second largest shareholder in Icade after the French state-controlled investment bank Caisse des dépôts et consignations.

The transaction will be carried out on the basis of two Icade shares and cash of €32.50 in exchange for 21 Lucette shares. Approved by Icade boards and by MSREF in December, the merger was effected through a sale by MSREF of 35% of Lucette share capital prior to year end for €9.61 per share. The second step, due to take place by March 15, is a contribution of MSREF’s remaining stake in Lucette on the basis of the same valuation and a reinvestment by MSREF in Icade via a reserved share capital increase.

The Lucette property portfolio was valued at €1.5 billion at June 30, 2009 and principally comprises high-quality office properties in key business districts in the Paris region. The combination will boost Icade assets under management to €5.7 billion in total, thereby making Icade the second largest office property owner among French SIICs. Icade has completely exited residential real estate, completing the final disposals in September. It said the new merged entity will enable it to strengthen the expansion of commercial real estate investment.