FOUR PRIVATE-EQUITY firms are leading investor groups seeking to buy Anglo Irish Bank’s $9.65 billion (€6.83 billion) of US property loans, according to two people with knowledge of the sale process.
Centerbridge Capital Partners is teaming with American International Group, Paulson and Co and BlackRock to make a bid, while Blackstone Group is working with Deutsche Bank, said the sources, who asked not to be named because the process is private.
TPG Capital is pairing with LoanCore Capital, while KKR and Co is with Westbrook Partners, the sources said. The groups may ultimately opt not to submit offers and coalitions may change before bids are due on August 9th, they said.
The firms are weighing offers for the entire portfolio of 248 loans, tied to buildings from Manhattan to Beverly Hills, and may sell them in pieces to property owners or other private-equity companies after the purchase, the sources said.
The competition underscores the appetite for real estate by buyout firms that are pushing deeper into acquisitions at the expense of smaller companies seeking deals.
“These consortia may be leading this process because they have sufficient firepower and expertise to take down the whole portfolio,” said Ben Thypin, director of market analysis for Real Capital Analytics in New York.
“A winning consortium is likely to retain some of the assets and quickly flip the rest to smaller firms that were unable to compete in the auction.”
Anglo is seeking to unload the assets after being nationalised two years ago. Bids are likely to value the loans at a discount to face value, the people with knowledge of the process said.
Representatives of Centerbridge, Blackstone, TPG and KKR declined to comment. Officials for their partners either did not comment or did not return messages.
Eastdil Secured and FTI Consulting are advising Anglo on the sale, the sources said.
The portfolio has been divided into eight pools, with the largest consisting of $2.26 billion of distressed office and industrial loans, according to an offering document from Eastdil.
Colony Capital, the private-equity and real-estate investment firm run by Thomas Barrack, is weighing a bid for the portion of loans that are considered subperforming and non-performing, according to a person familiar with the deal. That comprises roughly half the total Anglo US portfolio, or about $5 billion worth of loans. A Colony spokesman declined to comment.
Potential buyers may bid on the entire portfolio or on specific pools, according to the document.
Bids will not be accepted on individual loans, which are backed by such properties such as the Two Rodeo Drive shopping centre in Beverly Hills and the Apthorp apartment complex in New York, according to the document. – (Bloomberg)
