Green Property uses hybrid structure

Allen & Overy (A&O) and Clifford Chance advised opposite each other on the E1bn (£642m) take private of Green Property.

An A&O team led by global head of banking David Morley advised Merrill Lynch International and Bank of Scotland Group in relation to the senior debt aspects of the management buyout (MBO) of Green Property by Rodinheights.
The offer, which values the total share capital of Green Property after the issue at E1bn, was announced last week through the Irish and London Stock Exchanges.
Morley said that the deal followed on from the Haslemere transaction which was announced in March, where A&O advised Merrills on the E1.46bn bid for the Anglo-Dutch company. “It is the same team doing the work at Merrills and we have a good working relationship with them,” he said.
The structure of the deal was unusual because it was a hybrid between property and acquisition financing. “The structure needs to attract a variety of investors. People interested in property exposure will not be interested in leverage exposure and while the structure is similar to a leverage deal, the package is tailored to attract both groups of investors.”
In leveraged buyouts, investors are typically focused on cash flow, but in this transaction the focus was on the assets.
Morley said that this is becoming a bit of a trend. “Private equity investors think they can make money by investing in MBOs of property companies undervalued on the stock exchange,” he said.
There was a huge amount of interest in the transaction and the deal was negotiated and completed within 10 days.
The deal was simplified because the funds requirements in the Irish takeover code are similar to those in the UK takeover code.
Clifford Chance advised Rodinheights. It also advised Merrill Lynch and Bank of Scotland on the equity side. Green Property was advised by Arthur Cox.