Goldman to Buy Japanese Real Estate Co. with JV for $1.1B

 |  Includes: GS, NIKOY
by: Steven Towns

Goldman Sachs plans to acquire Japanese real estate investment service provider Simplex Investment Advisors Inc., for ¥124.7 billion ($1.1B), or ¥215,000/share, representing a 65% premium over its Thursday close. Goldman and joint venture partner Aetos Capital LLC are pursuing at least an 80% stake of Simplex, according to a report filed with the Tokyo Stock Exchange. Nikko Cordial, a 42.5% shareholder of Simplex issued a statement saying it agrees to sell its stake to the venture. Nikko said it will book a ¥44B gain. The JV will purchase Simplex shares in the stock market from Oct. 12 to Nov. 8. Simplex was founded in 2002 and has ¥622B of assets under management including 179 properties in Tokyo and other cities. Goldman's local managing director of real estate investments said the company sees more upside in real estate even though the market has rallied the past two years. However, "We need to be more selective in terms of future growth potential, location and quality of tenants when we assess investing targets," commented the director. Shares of Goldman Sachs lost 0.6% to $225.95 on Thursday. Simplex Investment Advisors jumped 15.4% (limit-up) to ¥150,000.

Sources: Bloomberg
Commentary: Goldman Sachs to Buy Tiffany's Tokyo Property -- WSJCiti to Acquire Rest of Nikko; List on Tokyo ExchangeMorgan Stanley to Buy 13 Japanese Hotels
Stocks/ETFs to watch: GS, OTC:NIKOY, Simplex Investment Advisors [Tokyo MOTHERS: 8942]
Earnings call transcript: Goldman Sachs F3Q07

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