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Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.

LONDON-Locally based opportunity fund manager Laxey Partners has, in a takeover offer, won a 37.5% stake in the AIM-listed Spazio, an investor in Italian industrial property launched and formerly majority owned by Italy’s largest quoted property company Pirelli Real Estate and the private Cypress Grove International Fund. The offer values Spazio at around €141 million, a 66% discount to net asset value as at the end of 2008.

After Laxey said on 19 June it already owned 24% of Spazio, and nearly 29% if the group cancels Treasury stock, it announced in early July acceptances in respect of 37.5% of Spazio ordinary shares and declared the offer unconditional in all respects – extended until July 24. It is subject to acceptances of over 50%, excluding current treasury stock. “Once this objective has been achieved, the Laxey Group currently intends to work with the existing Board of Spazio and Pirelli SGR and its affiliates,” Laxey says in the offer document. The preliminary June offer of €4.50 per share represented a premium of 13% over the immediately prior closing price, and valued Spazio at €113 million.

Spazio, focused on Italian industrial real estate market, particularly light industrial and logistics, was established in November 2005 by Pirelli and Cypress Grove, which has managed capital for the Soros group. Listed on AIM in October 2006, Spazio was designed by Pirelli to handle industrial investments and benefit from AIM investor capital, and invests via the closed fund Spazio Industriale to achieve tax efficiency. Its portfolio was independently valued at €731 million in December – after a depreciation of 4% on assets – and had annualized passing rents of €43 million. The assets comprised 370 income producing assets, 24,606 square meters of vacant assets and two development projects covering around 477,246 square meters of buildings. However Spazio declared a net loss last year of €8.6 million, and has total portfolio loan-to-value of 56.5%, very close to its global loan-to-value covenant of 60%.

At an extraordinary general meeting last December, Spazio shareholders approved an accelerated business plan to dispose of real estate assets with a value of €450 million over a three year period, suspend acquisitions, and return net cash to shareholders.

Laxey Partners, a globally active value investor, is making the offer through a special vehicle Terra European Investments owned by its Terra Catalyst Fund, domiciled in the Cayman islands. TerraCF seeks absolute returns for shareholders via capital growth by investment in property-related securities and dividend payments, and is also listed on AIM. Laxey director is Michael Haxby, an Isle of Mann resident who, prior to joining in 2001, worked at Regent Kingpin Capital Management and Buchanan Partners.

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