Covivio Advances in Hotel Sector with New Acquisition and Upcoming Public Exchange Offer

Covivio, a notable player in the real estate market, has completed the procurement of an 8.3% stake in Covivio Hotels from Generali, advancing its share to 52.2%. This strategic maneuver boosts its hotel portfolio representation from 17% to 20%, as it targets further growth in this lucrative sector. The transaction involved an exchange of new Covivio shares for Generali's holdings, detailed at a ratio of 31 Covivio shares for 100 Covivio Hotels shares, effective post-2023 dividends.

Additionally, Covivio has announced plans to launch a public exchange offer aimed at acquiring the remaining 47.8% stake in Covivio Hotels. Expected in the following weeks, this offer will mirror the terms set by Generali's contribution, further solidifying Covivio’s command over its subsidiary. However, Covivio confirmed no intents of conducting a squeeze-out or merging post-offer within 12 months. This development aligns with Covivio’s pursuit to enhance its hotel segment exposure, promising greater growth opportunities against the backdrop of expected increases in overnight stays.

The implications on the financial stability of Covivio include a 1% projected increase in recurring net income per share, and a minor decline in NAV by 0.3%. Covivio also expects improvements in debt metrics within Covivio Hotels, hinting at a healthier financial posture going forward. The effects of this transaction are slated for detailed disclosure in the 2024 half-year results.