Biggest real estate deal of the year enters final stage with two interested parties
Davidson Kempner and the Bain/Cerberus consortium have submitted bids for ECS's restructuring funds. Banks will choose a buyer by the end of the year and may even help finance the operation.
The largest Portuguese real estate deal of the year has entered a decisive phase. In April, the bank had already selected a shortlist of three investors for the second phase in the selling process of the ECS restructuring funds. Now, as far as ECO discovered, only Davidson Kempner and the Bain/Cerberus consortium have decided to go ahead with binding proposals, having submitted their respective offers within the deadline that ended on Monday last week.
At stake is a portfolio of luxury hotels, including the Conrad Algarve, the Cascatas Golf & Resort Spa by Hilton and the NAU group among other real estate assets, in a transaction that could reach €1 billion.
These real estate assets are held by the main national banks through participation units in funds that are managed by ECS, the company owned by Fernando Esmeraldo and António de Sousa.
According to information gathered by ECO, the buyer is expected to be chosen by the end of the year, with the closing of the operation expected to take place sometime during the first half of next year. A source close to the process reminded that there is still the risk of the deal not being concluded.
In the phase that has now ended, the financial institutions have already been negotiating directly with the interested parties, specifically in relation to the purchase and sale contract and also in relation to possible financing of the operation. The negotiations will now become more complex. The two proposals on the table are not likely to be directly comparable. On the other hand, the banks will want to negotiate the best possible price for the deal.
Novo Banco, BCP and Caixa Geral de Depósitos are the banks with the largest exposures in this group of assets, with Santander and Oitante (a financial vehicle created to manage Banif’s assets that were not purchased by Santander) also holding participation units in the ECS funds.
Regarding potential buyers, Davidson Kempner, Bain and Cerberus have all done business with Portuguese banks in the past and are known investors in the domestic market.
