On January 18, 2017, CEELM reported that CPI Property Group had acquired a high quality retail portfolio, including 11 shopping centers across CEE, from CBRE Global Investors. As soon as the transaction was closed on March 29, 2017, Martin Matula, the General Counsel at CPI Property Group, agreed to share his thoughts on the deal with us.*
CEELM: What legal and regulatory complexities did this cross-border transaction entail and how did you manage to solve them?
M.M: This EUR 650 million acquisition might be the biggest real estate deal completed in the CEE region this year. It was demanding due to size of the acquired portfolio and the multiple jurisdictions of the target assets, but also due to the high number of parties and advisors involved. The most challenging part was to centralize all participants to achieve effective negotiations and closing mechanics.
CEELM: Did you have full discretion to select your external counsel yourself? Why did you select Dentons?
M.M: We went through a thorough selection process for the external counsels to ensure that we received the best service for a transaction of such importance. We chose Dentons due to our past experience and also because of their strong presence in all jurisdictions related to this deal. Last not least we also relied on Evan Lazar’s direct involvement. He personally led the negotiations and significantly influenced the overall process.
Jitka Bortlickova of AK Rybar, Soppe & Partners also helped substantially on our side. With respect to competition aspects of the acquisition we mandated Kinstellar. We have been very satisfied with our external counsels involved in this transaction.
CEELM: Who all from your internal in-house team worked on the deal, and what were their responsibilities?
M.M: Tamas Pasztor from our Budapest office did a very good job on financing of the Hungarian assets.
CEELM: What impact is this acquisition expected to have on CPI’s legal team? Do you expect new responsibilities or colleagues to join the team?
M.M: Given that we acquired assets that are in operation, our goal is to ensure smooth transfer and continuous operation of the shopping centers. As such, we are taking over the current external counsels working for the respective assets. Within next 3-6 months we will review their performance and evaluate whether we will continue on external basis or if we integrate legal services for the new assets in house. In case we choose the in-house option, we will have to strengthen our teams in Hungary and Poland.
CEELM: What aspects of the negotiations would you describe as most challenging?
M.M: The size of the transaction brought many complexities. The negotiation and organization of the financing was the most challenging due to a large number of banks involved. Thankfully all parties showed high motivation and competence, such that we accomplished the successful closing.
* Our Deal 5 interview with the Deal Manager from CBRE Global Investors is coming up next week. Read that story to get the seller’s perspective on the transaction.