Commerzbank AG is in final stage talks to sell a large Spanish
portfolio of real-estate assets to Lone Star Funds and J.P. Morgan
Chase for between EUR3.7 billion and EUR3.9 billion (between $5
billion and $5.3 billion), people familiar with the matter said
Tuesday.
The deal, which one of these people said may close within a
month, would be the largest property transaction in Spain since the
country's real estate bubble burst six years ago and illustrates
foreign investors' renewed appetite for assets in the financially
stressed euro-zone countries of Europe.
The portfolio includes loans with a face value of about EUR4.5
billion that are backed by shopping centers, hotels and
offices.
Under the terms of the proposed deal, Lone Star will acquire the
majority of the loans in the portfolio, while J.P. Morgan will
acquire a minority and provide the financing for the deal, one
person said.
The auction, run by investment bank Lazard Ltd., initially
attracted more than a dozen large international investors,
including Blackstone Group LP and Cerberus Capital Management LP.
Many of these investors had teamed up with financial institutions
to bid.
The loans were originally extended by Eurohypo AG, a unit of
Commerzbank that is being wound down after suffering large losses
in recent years.
The deal will be structured in a similar way to the sale of
Commerzbank's GBP4 billion ($6.73 billion) U.K. real estate
portfolio last year, the people familiar added. Loan Star bought
the U.K. portfolio together with Wells Fargo & Co.
Write to Christopher Bjork at christopher.bjork@wsj.com and Eyk
Henning at eyk.henning@wsj.com
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