Citycon enters preliminary agreement to divest Finnish shopping centres

Finnish real estate investor Citycon has signed a preliminary agreement to sell some of its Finnish shopping centres for roughly €400 mln to a subsidiary of G City Ltd., its parent company.

This move aligns with Citycon's goal to sell approximately €1 bn in assets over the next two years. Citycon will continue to manage these properties and earn fees from them.

The deal is not yet final and depends on several conditions, including due diligence, agreement on terms, board approvals from both companies, and G City successfully launching a public offering for a new company that will purchase the assets.

Given that G City is Citycon's controlling shareholder (owning about 86.4% of Citycon shares), this is considered a "related party transaction." Therefore, the independent members of Citycon's board will need to approve it.

Citycon stresses that there's no guarantee the sale will go through, or what its final structure or timing will be, as many factors are outside of its control. These factors include regulatory approvals, financing, market conditions, and prospectus and listing approvals.