FIBRA Prologis Increased Its Offer to Acquire FIBRA Terrafina

FIBRA Prologis has revised its proposal to acquire FIBRA Terrafina, now offering an exchange ratio of 0.62 Prologis Real Estate Trust Certificates (CBFIs) for each Terrafina certificate. This offer aims to compete with six other interested parties in acquiring the FIBRA, which is considered strategic for capitalizing on the growing demand for industrial properties due to nearshoring. 

On May 17, 2024, FIBRA Prologis announced its intention to acquire Terrafina and published its proposal consisting of a tender to exchange up to 100% of Terrafina’s CBFIs with an exchange ratio of 0.580 Prologis CBFIs for each Terrafina CBFI. This offer involved the subscription and reciprocal delivery of up to 448,038,838 outstanding CBFIs issued by FIBRA Prologis, representing approximately 34% of its outstanding CBFIs, assuming full acceptance of the offer.

After his proposal, FIBRA Prologis received a tax opinion from Deloitte on Jun. 9, 2024, supporting its first proposal, stating that the delisting of Terrafina will not be considered a taxable event under Mexican tax regulations. Furthermore, on June 10, 2024, the company reported it received unanimous and unconditional authorization from the Federal Antitrust Commission (COFECE) to proceed with its tender offer and reciprocal subscription for up to 100% of Terrafina's CBFIs. This authorization will be valid for six months. After this, the company announced it extended its offer until June 21, 2024, as the first expiration date was set at Jun. 14, 2024. 

In the latest update on FIBRA Prologis' offer, the exchange ratio has been revised to 0.62 Prologis CBFIs for each Terrafina CBFI. The offer period has also been extended until July 2, 2024. The only remaining condition is that holders of at least 50% plus one of Terrafina's outstanding CBFIs must tender their shares.

Increasing Competition for Terrafina 

If FIBRA Prologis’ offer is approved, it would create a portfolio of approximately 8.3 million m² of industrial gross leasable area (GLA), with an occupancy rate of 98.4% and a land bank of over 1,542,190m².

However, FIBRA Prologis competes with other prominent FIBRAs and real estate companies like FIBRA Macquarie and Blackstone Real Estate. On June 17, 2024, FIBRA Macquarie announced it increased its non-binding offer to an exchange ratio of 1.125 for each Terrafina CBFI, up from the prior ratio of 1.05x. Additionally, FIBRA Macquarie announced a reduction in the fee structure for the management fee paid to its manager, contingent upon the completion of an acquisition of FIBRA Terrafina or any other merger or acquisition of a listed FIBRA or other company by FIBRA Macquarie in the future.

Blackstone Real Estate and its partner MRP Group have increased their offer for Terrafina's real estate trust certificates from MX$38.5 (US$2.9) to MX$39.5 per certificate. This represents a 24% premium over the unaffected price at the close of trading on December 4, 2023, and an 8% premium over Terrafina’s closing share price on Jun. 7, 2024. The offer, which is in cash, is the only one of its kind and provides immediate value for Terrafina's shareholders. It expires on July 17, 2024, with the settlement date expected to be July 24, 2024, subject to extension.