Shares in Hibernia REIT soared over 36% today after it said its board has recommended shareholders accept a €1.09 billion takeover bid made by a subsidiary of one of the real estate funds of Canada's Brookfield Asset Management.

Benedict Real Estate Bidco, a subsidiary of Brookfield Real Estate, made the offer to buy Hibernia REIT.

The offer of €1.634 per share - consisting of €1.60 per share and a 3.4 cent dividend - represents a 35.6% premium on the closing price of the shares at €1.18 yesterday, the last business day before the offer was made.

Under the terms of today's deal, Hibernia REIT shareholders will be entitled to receive €1.634 in cash for each Hibernia REIT share.

Hibernia REIT is the country's largest stock market-listed office landlord.

Danny Kitchen, Chair of Hibernia REIT, said that despite significant progress against its strategic objectives and a track record of successfully recycling capital into value accretive opportunities, Hibernia REIT has traded at a persistent discount to its prevailing EPRA NTA (net tangible assets) per share.

"The acquisition recognises the company's prospects and the quality of its portfolio of assets and delivers an acceleration of the value we expect to be created from completion of Hibernia REIT's major office development projects," he said.

The acquisition is conditional on the approval by Hibernia REIT shareholders and any necessary regulatory or other approvals.

Hibernia REIT said its share price had consistently traded at a discount to the value of its property portfolio since its 2013 stock market flotation.

This was the same complaint that prompted the €1.34 billion sale of rival Green REIT to Britain's Henderson Park in 2019.

Hibernia, which has a €1.3 billion property portfolio and tenants such as Twitter, Deloitte and HubSpot, said its shares had traded at a 21% average discount to its net asset valuation (NTA) over the last five years.

It listed a number of reasons for this, including expected near-term pressure on earnings while it redevelops income generating assets, the relatively low levels of liquidity in its shares, recent changes to the Irish REIT taxation regime and uncertainty over future office demand.

The offer therefore represents a 5.7% discount to its independently valued NTA per share at the end of last year, said Hibernia, which raised €385m at its IPO in 2013 and a further €300m a year later.

Credit Suisse and Goodbody Stockbrokers advised Hibernia on the deal. Goldman Sachs, JP Morgan Cazenove and Societe Generale acted as financial advisers to Bidco.

Shares in the company jumped in Dublin trade today.

Davy analyst Colin Grant said the offer came as no surprise as the stock has traded at a discount to the net tangible assets (NTA) for the last six years.

"Share buybacks did not close the discount to NTA and neither did significant asset disposals at book value," he said.

"Irish REIT legislation is highly restrictive on any further share buybacks, so there were no further actions available to management."

"The offer is at a premium to NTA and so has been recommended by the Board, which owns 1.37% of the stock. We expect the deal to close by the end of Q2, and it seems possible that a shareholder vote will take place in May."