Paris - Arabstoday
BNP Paribas, France’s biggest listed bank, said yesterday it would reap a 1.5 billion euro ($2 billion) capital gain from selling more than half its stake in real-estate firm Klepierre to Simon Property Group. The deal takes BNP a step closer to meeting tougher capital requirements under new banking regulations, intended to crack down on risk-taking, that have forced many European banks to slash their balance sheets and sell assets to beef up capital. It will also see Simon Property, the largest owner of US malls and outlet centres, become Klepierre’s largest shareholder with a 28.7 per cent stake. BNP still holds 22.2 per cent in the real estate company and there is speculation that a full exit of Klepierre is on the cards. BNP shares were up 4.2 per cent at 37.16 euros. The bank’s stock has gained 17.5 per cent so far this year, outperforming a 6.4 per cent rise for the STOXX Europe 600 index. The bank is targeting a 9 per cent core Tier 1 capital ratio under Basel III for January 1, 2013. The Klepierre deal lifts its ratio by 0.32 percentage points and reduces risk-weighted assets by around 25 billion euros, BNP said. The bank is targeting a further 3 billion euro cut in risk-weighted assets at its investment portfolio, which includes a stake in insurer Axa and private equity assets. Shares of Klepierre were up 6.5 per cent at 24.93 euros. Simon is paying 28 euros per Klepierre share, or a premium of 19.7 per cent on Wednesday’s closing price. Analysts said this was higher than expected. “Although Simon Property says it does not currently intend to increase its stake (in Klepierre), it seems to us that in the medium-term this is the direction we’re going in,” Natixis analyst Serge Demirdjian said. Simon Property Chief Executive David Simon will become the chairman of Klepierre’s nine-member supervisory board under the terms of the deal. Two other SPG representatives will also join the board. Simon Property will receive Klepierre’s dividend to be declared in April 2012. The Indianapolis, Indiana-based company has also agreed to acquire its joint venture partner, Farallon Capital Management LLC’s stake in 26 assets of the Mills Ltd Partnership for $1.5 billion.