Iaciu may end up owning about 50% in the company, once the tender offer ends, which would be the start of a new era for the developer, after the departure of founder Dan Ioan Popp.
After reaching 38% in Impact in July, which makes it mandatory for an investor to conduct a tender offer, Gheorghe Iaciu announced the price and the duration of the offer on the Bucharest Stock Exchange on Monday.
The businessman is willing to pay RON0.16 for each of the 122.57 million Impact shares now held by minority shareholders. The price is 4.7% lower than the latest quote, RON0.168. The operation will begin on Thursday, September 26 and end on October 10, with brokerage firm Swiss Capital in charge of it.
“I don’t think I’ll go over 50% after the end of the tender offer. Impact will remain a publicly listed company, I have no plans to delist it. Being listed is to Impact’s advantage,” Gheorghe Iaciu said.
The businessman owns the Expo Market Dorali shopping complex in Afumati (near Bucharest), has real estate and stock market investments and is the largest shareholder of Impact and regional fund SIF Muntenia (SIF4.RO).
Impact went public in 1996. Its founder, Dan Ioan Popp, was a trailblazer among Romanian entrepreneurs, building one of the first house compounds in the country and listing his company in 1996. It used the stock market to finance its residential development projects raising cash via capital increases and bond issues. Popp was a model for local entrepreneurs but few followed into his footsteps.
After ten years on the stock market, Impact’s capitalization had reached more than EUR300 million in 2007, which made it one of the largest publicly listed companies. The onset of the crisis, the decline of the real estate market, the lawsuits with clients and contractors and the management decisions badly hurt the company driving it to a market capitalization of merely EUR7.8 million. Impact was on the verge of insolvency in 2010 after a legal battle with builder Romconstruct based in Ploiesti and was suspended from trading for four months.
Impact settled with Romconstruct in 2013 after the new management backed by Iaciu took over.
Gheorghe Iaciu bought into Impact in March, when he took over the stake founder Popp had, about 16%, which Banca Transilvania (TLV.RO) sold to recoup an unpaid debt it had been used as collateral for. Popp had been ousted from his management position in 2012 by the several funds that had bought Impact shares over the years.
Iaciu then bought the shares Franklin Templeton and ING’s investment funds had. Swedish private equity fund East Capital remained a shareholder.
In June, he replaced the management team appointed by the funds with his own team of executives. He plans to turn the company around and to do that he needs capital. The shareholders approved a RON100 million convertible bond issue last week to raise cash for the company, which will also sell 5.18 hectares of the land it owns.
(English version by Loredana Fratila-Cristescu)