On October 9, 2017, CEELM reported that the Globalworth real estate company had invested outside Romania for the first time by acquiring Griffin Premium Real Estate in Poland. Catalin Tirziu, Head of Legal at Globalworth, agreed to share his insight on the transaction.
CEELM: CEE Legal Matters reported that “the transaction was carried out by way of a tender offer directed to all shareholders of GPRE.” Why was this method selected and how did it work exactly?
C.T: The acquisition of Griffin Premium RE.. N.V. (GPRE), which is a Dutch entity listed on the Warsaw Stock Exchange, was structured as a conditional investment agreement whereby Globalworth Asset Managers SRL, a Romanian entity subsidiary of Globalworth Real Estate Investments Limited, agreed to acquire a minimum of 50.01% and up to 67.90% of the issued share capital of GPRE. The conditional agreement was signed with Griffin Netherlands II B.V. and GT Netherlands III B.V., two Dutch entities that are indirectly controlled by Oaktree Capital Management Group LLC, and which together hold approximately 47.92% of the issued share capital of GPRE.
The tender offer was a legal requirement but also the parties’ commercial intention and the transaction was structured as a tender offer so that GPRE will retain its listing on the Warsaw Stock Exchange and a free float of public investors following completion of the investment.
Oaktree has agreed to subscribe in the tender offer to the extent required for Globalworth to acquire a minimum of 50.01% but no more than 67.90% of the issued share capital of GPRE taking into account subscriptions for the tender offer by other GPRE shareholders. Depending on levels of subscription by other GPRE shareholders, Oaktree could have determined not to proceed with the transaction if it would otherwise be left with a shareholding in excess of 10% following the tender offer, which, if so determined by Oaktree, would have resulted in the transaction no longer proceeding.
On Globalworth's side, the terms of the transaction were structured so as to ensure that its maximum percentage shareholding following the completion of the tender offer will not exceed 67.90%.
On November 29, 2017 the acceptance condition stated in the tender offer was satisfied and the tender offer became unconditional in all respects.
CEELM: Do you have any external counsel selection system in place at Globalworth? Why did you choose Dentons as counsel for this transaction?
C.T: As a listed company, Globalworth uses best market and industry practices for selecting is external contractors and advisors. Our selection system focuses primarily on the capacity of our external contractors advisors to deliver, in a timely manner, the premium quality services that are needed for entering into and successfully closing our projects to the best interests of Globalworth and its shareholders. The acquisition of GPRE is our first investment in Poland and a complex one, requiring a large multi-jurisdictional volume of work in parallel flows (tender preparation, transaction with the sellers, due diligence, financing, competition clearance, etc), and it was obvious to us that only a big law firm could handle a transaction of this size. For all the Polish law matters related to this transaction, as well as for certain Dutch and Luxembourg matters, we decided to work with Dentons, as we knew they had the expertise, know-how, and workload capabilities that we required. So far we are more than happy with the choice we made, as we found them to be a very proactive, knowledgeable, and dedicated team.
CEELM: The Dentons team assisting you consisted of lawyers working on the tender, on real estate aspects, on financing for the tender offer, and on merger control matters. Which of these aspects required the most hands-on involvement from you, and why?
C.T: Given the volume of work and Denton’s market expertise, we relied significantly on Denton’s team for most of the Polish legal work related to the transaction. We of course cooperated to understand the legal and business implications of their findings and recommendations, and made the legal and commercial decisions where needed. While the in-house legal work was limited, I have to give credit to and thank Skadden Arps Slate Meagher & Flom LLP, our UK lawyers coordinating the overall transaction, with which Dentons worked closely.
CEELM: Lawyers from Dentons' Warsaw, Amsterdam, and Luxembourg offices supported you on the Griffin buyout. Why were lawyers from Amsterdam and Luxembourg necessary?
C.T: The structure of GPRE required a multi-jurisdictional approach of the transaction. GPRE is a Polish real estate platform, and its assets are located in Poland, so we had a significant amount of work done by the Polish lawyers. However, GPRE is a Dutch entity, and its group structure includes also Luxembourg companies, so certain law aspects had to be assessed from Dutch law and Luxembourg law perspectives, respectively.
CEELM: Were there any aspects of this transaction that you decided to handle exclusively in-house with your legal team?
C.T: We kept only certain corporate documents needed for our internal approval process in-house. Other than that, we relied on our external advisors, who did all the hard work and without whom we wouldn’t be at this point of the transaction.