Blackstone has bought a majority stake in troubled Spanish property portfolio of Banco Popular, the failed bank rescued by Santander.
The US finance giant’s European fund, Blackstone Real Estate Partners Europe V, received EU regulatory clearance for the deal yesterday.
The transaction will involve the creation of a company to which Banco Popular will transfer assets with an aggregate gross book value of around €30bn (£27bn), as well as 100% of the share capital of Banco Popular’s real estate management company, Aliseda.
The valuation attributed to the Spanish assets of the business is around €10bn.
Blackstone will own a majority 51% stake in the new company while also assuming management responsibilities, while Banco Popular will own the remaining 49% stake. As a result, the aforementioned assets will no longer be consolidated on Banco Popular’s balance sheet.
Rodrigo Echenique, chairman of Santander Spain, said: “We are very pleased to enter into this partnership with Blackstone. The agreement significantly reduces our real estate exposures and further strengthens our balance sheet, allowing us to focus all our efforts on supporting customers. It is an important step in the integration process and demonstrates the quality of our execution capabilities. The interest generated in this transaction among international investors is also a clear sign of confidence in the Spanish economy and we are grateful to all bidders who participated.”
Jon Gray, global head of real estate at Blackstone, said: “This significant investment reflects our continued confidence in the robust recovery of the Spanish economy. We are delighted to partner with Santander to maximise the long term value of the portfolio.”