Gazit-Globe's Citycon To Purchase All Shares Of Sektor Gruppen For EUR 1.47 Bln

(RTTNews) - Gazit-Globe (GZT) announced that its subsidiary, Citycon, entered into an agreement to purchase all of the shares of Norway's second largest commercial real estate company, Sektor Gruppen, for consideration amounting to about EUR 1.47 billion subject to customary balance sheet and post-closing adjustments. The consideration will be paid in cash and by the assumption of debt.

Citycon will become the largest publicly-listed shopping center company in the Nordic region and the third largest in continental Europe, Gazit-Globe stated.

Sektor Gruppen is a private company focused on the development and operation of supermarket- anchored shopping centers in Norway.

The company noted that Sektor's revenues in 2014 were EUR 127 million and its net operating income amounted to approximately EUR 75 million. The net initial yield of the assets is approximately 5.2% with the potential for substantial organic growth, which is expected to be accretive to Citycon's earnings per share from 2016. As of December 31, 2014, the Sektor portfolio had an occupancy rate of 96.5%.

Citycon intends to finance the acquisition through a rights issue of approximately EUR 600 million, a EUR 250 million bridge financing facility obtained from a syndicate of Nordic banks, and, if necessary, from existing credit facilities. In addition, waivers have been obtained for approximately EUR 671 million of the existing bank financing facilities of Sektor to remain in place upon closing. The closing of the transaction is expected to take place in July 2015.