Acquisition of Reale Compagnia Italiana s.p.a. by Blackstone for €1.2bn

Reale is a long-standing Milan-based real estate company that owns 14 trophy assets (#13 in Milan and #1 in Turin) with total annual passing rent of ca. €27m. The portfolio has mixed destinations of use: retail (56% of rental income), office (23%), residential (12%), and hotel (9%). Portfolio’s largest and most iconic asset is Via Montenapoleone 8 in Milan, a trophy building leased to several leading luxury groups (LVMH, Kering, Prada among others). As one of the world’s best luxury fashion corners, this asset hosts the iconic Cova Cafè acquired by LVMH for over €30m key money after a battle with Prada. Reale’s shares are currently held by more than 300 individuals, descendants of the founding families, with 69% of the capital bound by a shareholder agreement.

BPPEH is a wholly-owned subsidiary of Blackstone Property Partners Europe, a real estate core+ fund managed by Blackstone with pro-forma gross asset value of €8.3bn.

On September 22nd, 2021, Rialto HoldCo submitted a binding offer to acquire the 69% stake in Reale held by the shareholder agreement. The offer was fully accepted. Despite Reale not being listed, as anticipated and suggested to Blackstone by Mediobanca Legal Team, the Offeror has elected to launch a Voluntary Tender Offer on the remaining outstanding shares of Reale, considering that such shares are held by over 150 individuals. The purchase price of the Offer will be €152k per share, valuing the equity of Reale at €1.1bn and its Enterprise Value at €1.2bn.

Mediobanca is acting as sole M&A advisor of BPPEH and is providing the necessary cash confirmation in the context of the Offer. Moreover, in July 2021, Mediobanca arranged a 5-year €145m secured financing to Reale, to provide the company with the necessary resources to carry out the revaluation of its RE portfolio in view of the potential sale to Blackstone.

The deal represents the largest ever Real Estate company buyout in Italy.
     
The transaction reaffirms Mediobanca capabilities in originating, structuring and executing complex Real Estate transactions, leveraging on the successful collaboration between the Corporate Finance and Debt divisions, and also helps strengthening Mediobanca’s relationship with Blackstone.

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