Author Topic: NRE - NorthStar Realty Europe Corp  (Read 4441 times)

writser

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Re: NRE - NorthStar Realty Europe Corp
« Reply #10 on: March 13, 2019, 04:44:56 AM »
Some tidbits from the Q4 press release and deck:

- As of December 31, 2018, total equity was $678 million (U.S. GAAP depreciated value), or $13.52 per share and EPRA NAV was $20.67 per share, which includes approximately $0.30 per share related to the incentive fee payable to NRE’s Manager for 2018 performance and costs associated with the strategic alternatives process.
-  Since the authorization in March 2018 through December 31, 2018, NRE repurchased a total of 6.1 million shares of common stock for approximately $83.4 million at a weighted average price of $13.73 per share.
- NRE joined the S&P Small Cap 600 index in February 2019.
- On March 1, 2019, NRE completed the disposal of Uhlandstrasse, an office property in Frankfurt, Germany for $41 million, representing a 65% premium to the allocated purchase price including funded capital expenditures and releasing approximately $25 million of net equity after repayment of financing and transaction costs.
- NRE had 50.1 million shares of common stock, operating partnership units and restricted stock units (“RSUs”) not subject to performance hurdles outstanding as of December 31, 2018.
- As of December 31, 2018, the termination fee due to the Manager was $64.6 million. No Incentive Fee will be payable to the Manager for any period after the termination date.

All good, but shares are up quite a bit since the beginning of this topic and are now trading, by my rough calculations, at a ~3% discount to EPRA nav, adjusted for termination & incentive fees. Maybe I sold a bit too soon but at current prices I'm not that interested in getting back in.

No news about the strategic review so far. Maybe the conference call today is interesting.
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writser

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Re: NRE - NorthStar Realty Europe Corp
« Reply #11 on: April 27, 2019, 01:59:40 AM »
Quote
On April 23, 2019, the Company and the Asset Manager entered into Amendment No. 2 to the Asset Management Agreement ("Amendment No. 2"), as amended by the Amendment, extending the date used in the definition of Triggering Date (as defined in the Amendment) from April 30, 2019 to June 30, 2019 to accommodate the ongoing strategic process as announced in the November 8, 2018 Form 8-K. Amendment No. 2 extends the time in which the Company has agreed to use commercially reasonable efforts, consistent with the fiduciary duties of the strategic review committee and the Company's board of directors, to enter into a definitive agreement providing for a NRE Change of Control.

Quote
As also contemplated by the Amendment, on April 22, 2019, the Company entered into an Employee Transition Agreement with the Asset Manager and the Asset Manager Parent (the “Employee Transition Agreement”). Pursuant to the terms of the Employee Transition Agreement, the parties agreed that certain employees of the Asset Manager and its affiliates would be available for hire by the Company or an acquirer of the Company from and after the termination of the Asset Management Agreement pursuant to the Amendment. The Employee Transition Agreement also (i) eliminates the Company’s obligation to reimburse the Asset Manager Parent for 50% of the cash severance payments payable to Mahbod Nia, the Chief Executive Officer of the Company, if his employment is terminated in connection with an NRE Change of Control, and reduces such reimbursement obligation from 50% to 25% of the cash severance payments payable to Mr. Nia if such termination of employment is in connection with an Internalization

Strategic review still ongoing.
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writser

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Re: NRE - NorthStar Realty Europe Corp
« Reply #12 on: June 20, 2019, 09:17:48 AM »
NRE traded down the past few months and is now trading sub-$16 again as the end of the strategic review (June, 30) gets nearer and nearer without any news. I haven't done my homework yet but EPRA NAV should be around $20.50 or roughly $19.25 if you subtract the termination fee payable. I.e. you buy the real estate at a low two-digit discount. Probably a decent bet if they sell or liquidate. Is the market getting jittery about NRE possibly continuing as a standalone entity? Seems like that would not be a good outcome for Senvest and Colony. Maybe the real estate valuations are simply too optimistic. We'll see. No position, but might buy some shares. Seems like a decent bet at first glance.

Decent writeup: https://konekoresearch.com/2019/06/20/northstar-realty-europe-strategic-alternatives-review-deadline-approaching/ . Seems a bit conservative with respect to what will happen with the RSU's but again, haven't done my homework yet.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: NRE - NorthStar Realty Europe Corp
« Reply #13 on: June 26, 2019, 12:55:22 PM »
Down ~3% today as the end of the strategic review is only a few days away. The market is getting nervous. I bought a small position. An activist has a decent position, Colony probably also wants to sell after getting their termination fee, double digit discount to appraised NAV, and the company has been busy doing good things the past 12 months. The downside seems somewhat limited to me. Seems very likely somebody will snap up their assets one way or the other and I don't see it trading at a huge discount in the meanwhile. Still, not my best idea, small position, DYODD. Perhaps I'm underestimating the risk that the board will still come up with some convoluted transaction with Colony.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: NRE - NorthStar Realty Europe Corp
« Reply #14 on: June 27, 2019, 12:25:43 PM »
The rumor mill is starting: "a consortium led by Vivion Capital Partner is bidding for NorthStar Realty Europe (NYSE: NRE), according to Bloomberg, citing people familiar with the matter. Negotiations are ongoing.". I've been buying a few extra shares. Situation is already attractive on its own and though I don't assign much weight to the rumors it's certainly a net positive. Still only a ~2% position, I'm a pussy - low conviction idea.
« Last Edit: June 27, 2019, 12:27:57 PM by writser »
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writser

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Re: NRE - NorthStar Realty Europe Corp
« Reply #15 on: July 03, 2019, 03:09:21 PM »
And ... a deal is struck (link). ~$17.03 per share, early Q4 close expected. Shareholders should still receive a $0.15 dividend.

Interesting merger consideration: Under the terms of the merger agreement, NRE stockholders will receive in cash at closing, for each share of common stock, US$1.68 plus the U.S. Dollar equivalent of €9.26 and £3.82, representing an estimated per share merger consideration of US$17.03 based on three month forward foreign exchange rates.

Looks like the buyer didn't want any currency exposure. And they found a lot more costs to subtract from EPRA NAV than I did!

This was just a small position but there's food on the table again. Market provided a pretty good entry point a few days before the end of the strategic review (at least in hindsight). Also a nice selling opportunity when it was announced NRE would join the S&P small cap 600 this winter.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.