A major step towards strengthening exposure to the hotel business

Increased exposure to hotels and improved financial indicators

On April 19^th, Covivio and Generali finalized the contribution of 8.3% of the capital of Covivio Hotels held by Generali in exchange for new Covivio shares. The exchange ratio for this transaction is 31 Covivio shares for 100 Covivio Hotels shares, ex-dividends (2023). Generali has undertaken not to transfer the Covivio shares it has received in exchange for its Covivio Hotels shares until July 31^st, 2024. Covivio now holds 52.2% of the capital and voting rights of Covivio Hotels.

This transaction is part of a strategic move to rebalance the Group’s portfolio, thereby increasing exposure to the hotel sector, which has demonstrated its ability to outperform inflation and GDP growth over a long period and offers promising growth prospects. Growth in overnight stays is expected to reach +5%/year by 2030[1], while future supply represents only 2% of existing hotel stock on average in Europe.

With this contribution[2], equivalent to the acquisition of €500 million in assets, Covivio is strengthening its position in one of the highest-quality portfolio on the market, comprising 313 prime hotels, 89% of which are in major European tourist cities such as Paris, Berlin, Rome, London, Barcelona, and Madrid.

The share of hotels in Covivio’s portfolio now stands at 20%, compared with 17% at the end of 2023, accelerating the balancing between hotels, offices, and residential units.

This reinforcement will have a positive impact on recurring net income (adjusted EPRA Earnings) per share of around +1% (quasi-neutral for NAV, at -0.3%). The 2024 recurring net income guidance communicated in mid-February 2023 (of around €440 million) does not take into account this transaction, the impact of which will be clarified at the time of the 2024 half-year results. Covivio’s debt indicators will also be improved, with Covivio Hotels posting an LTV ratio of 34% and a Net Debt/EBITDA ratio of 8.5x.

Launch of a public exchange offer for the remaining share capital of Covivio Hotels

In the coming weeks, Covivio will launch a mandatory public exchange offer (the “Offer”), in the form of a simplified offer, for the remaining share capital of Covivio Hotels, on the same terms as the contribution by Generali (31 Covivio shares for 100 Covivio Hotels shares, ex-dividends 2023). Covivio does not intend to implement a squeeze-out at the end of the Offer, nor to carry out a merger within 12 months of the closing of the Offer.

In this context, Covivio Hotels’ Supervisory Board set up on February 22^nd, 2024, an ad hoc committee comprising Adriana Saitta, Caisse des Dépôts et Consignations and SOGECAP. On March 5^th, 2024, the Supervisory Board appointed the firm Abergel, represented by Mr. Jean-Noël Munoz, as independent appraiser, in accordance with the ad hoc committee’s proposal, to give an opinion on the financial terms of the Offer, and whose report will be reproduced in Covivio Hotels’ response memorandum.

The Offer, which is subject to a compliance decision by Autorité des Marchés Financiers (the AMF), was the subject of a resolution approved by Covivio’s Annual General Meeting on April 17^th, 2024.

The draft offer document relating to the Offer was filed today. More detailed information on the Offer will be available in Covivio’s press release on the Offer that will be published today pursuant to article 231-16, II of the AMF’s general regulations, as well as in the draft offer document available on Covivio’s website (https://www.covivio.eu/fr/) and on the AMF’s website (www.amf-france.org).

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[1] Source : Oxford Economics

[2] The contribution transaction was the subject of reports on the remuneration and value of the contributions drawn up by a contribution appraiser and was concluded on the basis of a parity of 31 Covivio shares for 100 Covivio Hotels shares, ex-dividends (2023).