Property Fund to launch EUR 135 million buyback tender

Newsroom 14/10/2013 | 14:55

Franklin Templeton, the administrator of the EUR 3.35 billion Property Fund (FP), will launch on Tuesday the first buyback tender offer on the Romanian capital market, for the fund’s shares worth RON 600 million (EUR 135 million).

The action was approved by the Financial Supervision Authority (FSA) last week.

Greg Konieczny, fund manager at FP, said the tender will decrease the discount in the fund’s shares, running at 34.5 percent in September.

“This is common practice to return funds to shareholders. We expect the offer to be oversubscribed and we will further consider the launch of new buyback offers if we secure the agreement of shareholders and of the FSA,” said the manager, quoted by Agerpres newswire.

Under the offering terms, FP will pay one leu per share – covering the discount – to buy back 4.35 percent of its own shares.

BCR, controlled by Austria’s Erste Bank, and Wood&Company Financial Services, a brokerage, will act as intermediaries in the tender, which runs through to November 4.

The fund started to buy back shares in April 2013, but the administrator said the acquisition pace fell short, completing only 24 percent of the program.

The FP is currently controlled by foreign institutional investors, which have 58.6 percent of the shares, while Romanian private individuals have 22.6 percent. Romanian institutional investors have an 8.5 percent stake and foreign private individuals have 5.95 percent of the shares.

The largest shareholders are US-based hedge fund Elliott Associates with a 14.95 percent stake and US lender Morgan Stanley with a 5.14 percent stake, according to September data.

The FP is weighted towards the energy sector, which generates more than 85 percent of its net asset value (NAV). The fund has stakes in state-owned companies and private players of the likes of oil and gas producer OMV Petrom or natural gas producer Romgaz.

FP shares were down 1.16 percent to RON 0.7690 on closing Monday trading on the Bucharest Stock Exchange (BSE).

Ovidiu Posirca

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