(Ecofin Agency) - Greenbay Properties, a Mauritian firm specialized in real estate investment and listed on the Johannesburg Stock Exchange, made an offer of R1.6 billion ($120 million) to buy Group Five’s European assets. The latter is a South African company active in the construction sector.

With this offer, Group Five’s capitalization which was of one billion rand has soared by 60%, suggesting that the firm was under-valued in the local financial market. On the South African stock market where the South African firm is listed, its share rose by 37.6% to R12.6 after the announcement.

According to a statement released in the JSE investors’ bulletin, Group Five has established an independent board to assess the pertinence of the offer.

Greenbay Properties seems well prepared for the operation. Indeed, its investment portfolio comprises close to 48% of assets in the U.S. market and 32% in Europe. Additionally, it is stated on its website that 77% of its assets (real estate and infrastructures) are listed.

The offer is very likely a new breath of fresh air for Group Five considering that for its 2016 year, ended last June, its turnover slumped by 21.6% from R13.8 billion ($1.03 billion) to R10.8 billion ($816.4 million), according to the firm’s financial report published last August 22. 

Idriss Linge